India's central bank on Thursday kept interest rates at a seven-year-low despite inflation concerns and a recent spurt in economic growth. The Reserve Bank of India (RBI) said the benchmark repo rate - the level at which it lends to commercial banks -- would remain unchanged at 6.0 percent. Analysts had predicted the central bank would not move despite rising global oil prices.
Monetary authorities are also anxious not to cause jitters after a $2 billion fraud scandal at the country's second largest state lender Punjab National Bank (PNB). The central bank's policy report said inflation was expected to firm up before moderating for the financial year 2018-19. It also expressed concerns over rising oil prices. It said "volatile" international prices in recent weeks have "adversely impacted the outlook for crude oil prices". India imports nearly 80 percent of its oil. Currently, India's retail inflation has slowed to 4.44 percent while the GDP figures for the quarter to December 31 showed signs of revival with an annual rate of 7.2 percent growth.
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