India’s central bank leaves rates unchanged, as expected

INDIA’S key rate was left unchanged for a sixth straight meeting on Thursday, as inflation remained above the central bank’s 4 per cent medium-term target while economic growth continued to be resilient.

The six-member monetary policy committee, consisting of three Reserve Bank of India (RBI) and three external members, left the key repo rate unchanged at 6.50 per cent after having raised it by 250 basis points between May 2022 and February 2023.

Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement.

Five out of six members voted in favour of the rate decision.

Annual retail inflation rose to 5.69 per cent in December from November’s 5.55 per cent, well above the 4 per cent target. However, a sustained fall in core inflation and a fiscally prudent budget have raised expectations of a possible change in the RBI’s monetary policy stance.

Traders will scrutinise Das’ speech to get a sense of the timeline for a policy pivot while any measures to ease tight cash conditions in the banking system will also be key. REUTERS