The Reserve Bank kept the key policy rate unchanged at 6 per cent for the third consecutive time today in view of firming inflation.
The Monetary Policy Committee (MPC), headed by RBI
Governor Urjit Patel
had last reduced the benchmark lending rate by 0.25 percentage points to 6 per cent last August, bringing it to a 6-year low.
In its December review, the MPC had kept the benchmark interest rate
unchanged on concerns of a possible price rise but had left the door ajar for a rate cut in future.
Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items. The retail inflation, based on Consumer Price Index (CPI), was 4.88 per cent in November. In December 2015, it was 3.41 per cent.
— Inflation forecast raised
— Inflation Outlook: CPI
inflation for 2018-19 is estimated in the range of 5.1-5.6 percent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 percent in H2, with risks tilted to the upside.