MUMBAI, Feb. 6 (Xinhua) -- India's Central Bank on Thursday kept its policy rates unchanged at 5.15 percent for the second consecutive time giving priority to surging inflation over economic growth.
The Reserve Bank of India's six-member bi-monthly Monetary Policy Committee (MPC), which unanimously voted on the status-quo in interest rates, continued with its accommodative stance at its two-day bi-monthly monetary policy meeting that concluded Thursday.
"Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo. Accordingly, the MPC decided to keep the policy repo rate unchanged and persevere with the accommodative stance," said the Reserve Bank of India statement.
Stating that there is policy space available for future action, the Central Bank said that the path of inflation is elevated and highly uncertain and on a rising trajectory.
The rising inflation was attributed to prices of milk and pulses, volatile oil and rising input costs for services that has compelled the Central Bank to raise its inflation projection to 5-5.4 percent from 3.8-4 percent earlier.
On growth, the Central Bank sees 2020-21 (April-March) Gross Domestic Product at 6 percent from the 5 percent in the current fiscal year that will end in March.
The MPC observed that Asia's third largest economy continued to be weak and the output gap remains negative. While some high-frequency indicators have turned around and point to a lift in the momentum of economic activity, there is a need to await incoming data to gauge their sustainability, the statement said.
The Reserve Bank of India's six-member bi-monthly Monetary Policy Committee (MPC), which unanimously voted on the status-quo in interest rates, continued with its accommodative stance at its two-day bi-monthly monetary policy meeting that concluded Thursday.
"Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo. Accordingly, the MPC decided to keep the policy repo rate unchanged and persevere with the accommodative stance," said the Reserve Bank of India statement.
Stating that there is policy space available for future action, the Central Bank said that the path of inflation is elevated and highly uncertain and on a rising trajectory.
The rising inflation was attributed to prices of milk and pulses, volatile oil and rising input costs for services that has compelled the Central Bank to raise its inflation projection to 5-5.4 percent from 3.8-4 percent earlier.
On growth, the Central Bank sees 2020-21 (April-March) Gross Domestic Product at 6 percent from the 5 percent in the current fiscal year that will end in March.
The MPC observed that Asia's third largest economy continued to be weak and the output gap remains negative. While some high-frequency indicators have turned around and point to a lift in the momentum of economic activity, there is a need to await incoming data to gauge their sustainability, the statement said.
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