India's central bank holds key rate steady as expected

(Reuters) - The Reserve Bank of India's key lending rate was held steady for a third straight policy meeting on Thursday, as widely expected, as inflation concerns resurfaced following higher-than-usual seasonal spikes in food prices in recent weeks.

The monetary policy committee (MPC), which has three members from the central bank and three external members, kept the repo rate unchanged at 6.50% in an unanimous decision. It was the third consecutive time that the committee decided to maintain rates.

COMMENTARY:

UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI

"The MPC preferred to remain on a wait-and-watch mode along expected lines. We believe the seasonal uptick along with erratic weather conditions will continue to keep the hawkish bias of the MPC intact in the upcoming meetings as well."

"However, we expect the rates to remain unchanged through the rest of the year as they evaluate the impact of earlier monetary tightening in growth and inflation."

JAHNAVI PRABHAKAR, ECONOMIST, BANK OF BARODA, MUMBAI

"(There will be) no rate action before December 2023 by RBI while they will remain data dependent going ahead, given the expectations of spike in vegetable inflation in the coming months."

(Reporting by Nishit Navin in Bengaluru; Editing by Sohini Goswami)