MUMBAI (Reuters) – The Reserve Bank of India’s key lending rate was held steady for a third straight policy meeting on Thursday, as widely expected, as inflation concerns resurfaced following higher-than-usual seasonal spikes in food prices in recent weeks.
The monetary policy committee (MPC), which has three members from the central bank and three external members, kept the repo rate unchanged at 6.50% in an unanimous decision, with five out of six members voting in favour of the decision.
India has raised rates by 250 basis points (bps) since May 2022 in a bid to cool surging prices.
Food price spikes in India, typical at the onset of the monsoon, drove up headline inflation in June, snapping a four-month downward trend. Analysts expect it to have reached 6.4% in July, moving out of the RBI’s 2%-6% comfort band.
