India's Central Bank holds policy rates unchanged to control inflation
December 7, 2019 | 5:05 PM
by Xinhua
Shaktikanta Das, governor of the Reserve Bank of India, at a press conference held at the RBI head office in Mumbai, India. Picture: Xinhua

Mumbai: India's Central Bank announced to maintain the repo rate unchanged at 5.15 per cent on Thursday, giving priority to control inflation rather than the diminishing growth in Asia's third-largest economy.

The statement was made after the country's Reserve Bank of India's Monetary Policy Committee (MPC) concluded its two-day meeting on Thursday.

"Given the evolving growth-inflation dynamics, the MPC (Monetary Policy Committee) felt it appropriate to take a pause at this juncture," said the Central Bank statement, cutting the current full-year growth forecast to 5 per cent from 6.1 per cent earlier.

Most market experts were expecting at least a 25-basis points rate cut.

While cutting the current full-year growth forecast to 5 per cent from 6.1 per cent seen in October, the Central Bank said the October inflation at 4.6 per cent was "much higher than expected," breaching its 4 per cent medium target for the first time in over a year.

Raising its inflation forecast for the 2nd half of the financial year ending March 2020 to 5.1-4.7 per cent from the previous target of 3.5-3.7 per cent, the Central Bank expects vegetable prices to continue to rise referring to the rising prices of onions and tomato in recent months.

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