Decreasing Consumer Inflation
The Reserve Bank of India (RBI) kept its key policy repo rate unchanged at 8.0 percent on Tuesday, as widely expected, while warning of risks to its target to bring consumer inflation down to 6 percent by January 2016.
“This continues to warrant policy preparedness to contain pressures if the risks materialise,” the RBI said in a statement following the policy review.
“Therefore, the future policy stance will be influenced by the Reserve Bank’s projections of inflation relative to the medium term objective which is 6 per cent by January 2016, while being contingent on incoming data.”
In a separate report on inflation, the RBI spelled out its concerns, noting elevated inflation expectations among households and an enduring risk of higher food prices.