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India's central bank keeps rates unchanged

December 07, 2018 00:00:00

MUMBAI, Dec 06 (Reuters): India's central bank kept interest rates unchanged at a policy meeting on Wednesday to offer support for an economy that has lost some momentum, in a decision that was widely expected as inflation has eased significantly.

The monetary policy committee (MPC) kept the repo rate unchanged at 6.50 per cent as predicted by 64 of 70 analysts in a Reuters poll. The central bank also retained its 'calibrated tightening' stance as expected.

All six members of the MPC voted to keep the rates on hold.

"We believe that the RBI is likely to change stance to 'neutral' in early 2019. We perceive that India is slowly entering into a low inflation, slowing growth quadrant. We could possibly see growth slowing down from here to even clocking below 7 pct by Q4 FY 19, with headline inflation remaining capped on the back of low food inflation, and reducing core momentum."

"Our base case remains of a prolonged pause on repo rate."

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