Central Bank of India kept rates unchanged, raising the forecast of inflation

the Reserve Bank of India kept key interest rates unchanged, aiming to maintain economic growth and curb accelerating inflation.

REPO Rate was maintained at the level of 5.15%, the message says the Reserve Bank of India. This decision was in line with expectations of all 37 economists surveyed by Bloomberg.

the regulator has kept the “challenging” position in relation to monetary policy.

All six members of the monetary policy Committee voted to maintain stable rates and loose monetary policy.

“the monetary policy Committee recognizes that there is a space for future actions concerning monetary policy, — stated in the message of the Central Bank. — However, inflation increased and remain on an upward trajectory”.

Annual inflation in India in December jumped to 7.35%, mainly due to food prices and reached its highest level in more than five years.

the Reserve Bank of India has reduced interest rates combined with 135 basis points in the past year. In December, the regulator unexpectedly kept its key rate unchanged due to concerns about accelerating inflation.

Now the Central Bank of India expects inflation in the current fourth quarter of the 2020 fiscal year will reach 6.5%. In December, the regulator had forecast that inflation will be 4.7-5.1% in the second half of the current fiscal year.

the Central Bank raised the inflation forecast for the first half of next Vigoda, which will end in September, with 3.8-4% to 5-5,4%

India’s GDP Growth forecast of the Central Bank, in the next fiscal year, which begins in April, accelerating to 6% compared with 5% in the current Pingdu.

the Regulator said downside risks to growth from the coronavirus, warning that the outbreak in China could “affect the influx of tourists and global trade”.