NEW DELHI
\nIndia\u2019s central bank kept borrowing costs at a record low for an eleventh straight meeting, while warning of impacts from the risks of Russia\u2019s war in Ukraine and pledging to remove some liquidity in the banking system.
\nThe Reserve Bank of India\u2019s six-member Monetary Policy Committee voted to hold the benchmark repurchase rate at 4%, as predicted by all 36 economists surveyed by Bloomberg.
\nThe panel decided to keep its accommodative stance, Governor Shaktikanta Das said Friday, while focusing on withdrawal of banking liquidity accommodation \u201cto ensure that inflation remains within the target going forward while supporting growth.\u201d
\nA recovery in Asia\u2019s third-largest economy is facing fresh challenges from the war in Ukraine and Covid-19 lockdowns in China, which risk exacerbating a global supply squeeze and price pressures. Das on Friday said the global economy is seeing \u201ctectonic shifts\u201d from the war and extreme volatility in commodity and financial markets.
\n\u201cCaught in the cross current of multiple headwinds, our approach needs to be cautious but proactive in mitigating the adverse impact on India\u2019s growth, inflation and financial conditions,\u201d Das said.
\nIndia\u2019s central bank on Friday also announced a new tool that will enable the monetary authority to soak up excess cash in the banking system as part of its liquidity normalization efforts.
\nThe decision comes as many central bank peers begin tightening, led by the Federal Reserve, which is expected to continue raising rates when it meets in May. Policymakers globally have started shifting their focus toward fighting inflation as recoveries from the pandemic begin to take hold.
\nThe central bank on Friday raised its inflation forecast to 5.7% for the fiscal year that started April 1, up from its 4.5% in February. The central bank also sees gross domestic product growth during the year at 7.2%, compared with a previous outlook of 7.8%.<\/p>\n","protected":false},"excerpt":{"rendered":"
NEW DELHI India\u2019s central bank kept borrowing costs at a record low for an eleventh straight meeting, while warning of impacts from the risks of Russia\u2019s war in Ukraine and pledging to remove some liquidity in the banking system. The Reserve Bank of India\u2019s six-member Monetary Policy Committee voted to hold the benchmark repurchase rate […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-253825","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"yoast_head":"\n