India holds key rate in surprise move

MUMBAI (Reuters) – Indias central bank held its key repo rate steady on Thursday, after having raised it at each of six previous meetings, as risks to growth have risen following recent global financial turmoil.

The Reserve Bank of India said it stood ready to act against inflation if conditions warranted, with Governor Shaktikanta Das saying the decision to pause was “for this meeting only”, signalling further rate hikes were still possible.

The monetary policy committee (MPC), which has three members from the central bank and three external members, retained the key lending rate or the repo rate at 6.50%, in a unanimous decision.

Most analysts had expected one final hike of 25 basis points in the RBIs current tightening cycle, which has seen it raise the repo rate by a total of 250 bps since May last year.

Early signs of a slowdown in India are visible in easing imports and plateauing bank credit demand. Although inflation remains elevated, it is expected to ease.

(Reporting by Swati Bhat and Sudipto Ganguly; Editing by Sonali Paul and Clarence Fernandez)