MUMBAI, June 7, 2024 (BSS/AFP) - India's central bank kept interest rates
unchanged for the eighth time in a row on Friday, as inflation risks continue
to linger in the world's fifth-largest economy.

The Reserve Bank of India (RBI) said its benchmark repo rate, the level at
which it lends to commercial banks, would remain steady at 6.50 percent.

Two major central banks have started bringing down interest rates, including
the European Central Bank which on Thursday cut rates for the first time
since 2019.

Inflation in India has cooled from its 2022 peak of 7.8 percent but still
remains above the RBI's four percent target.

RBI governor Shaktikanta Das said the bank "remains vigilant to any upside
risks" of inflation, particularly from food prices.

The decision comes days after Prime Minister Narendra Modi's Bharatiya Janata
Party failed to secure an outright majority in the national elections,
forcing it to depend on coalition partners to govern.

Experts believe that may force Modi's next administration to resort to
populist spending to shore up its support base and mollify allies, which
could stoke inflation.

India's economy grew at a robust 8.2 percent in the year to March, with a
surging manufacturing sector helping beat government and analyst forecasts.

Interest rates were hiked by 2.5 percentage points between May 2022 and
February 2023, but have been unchanged since.

India's retail inflation came in at 4.83 percent in April, almost level from
the previous month and led mainly by an increase in food prices.

The country's "core" inflation, which excludes food and fuel costs, remained
below 4 percent.

The International Monetary Fund expects India's gross domestic product growth
to taper slightly to 6.8 percent in 2024-25, which will still make it the
fastest-growing among large economies, according to forecasts from April.