The Reserve Bank of India kept its policy repo rate unchanged at 6.0% in a 5-1 vote, it said, adding that households' inflation expectations were rising.
The reverse repo rate was maintained at 5.75%, and the marginal standing facility rate and the bank rate will both remain at 6.25%. One member of the monetary policy committee favored a rate cut by 25 basis points, it said.
But consumer price inflation rose to a seven-month high in October, and the RBI expects inflation to increase from its current level and range between 4.2% to 4.6% in the second half of 2017. A survey of households by the RBI showed inflation expectations firming up in the latest round for both three-months-ahead and one-year-ahead horizons.
India's real gross value added growth accelerated for the first time in six quarters in the second quarter of the 2017-2018 fiscal year, even as private final consumption expenditure slowed to an eight-quarter low, the central bank said.
