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India’s monetary policy committee has decided to hold the central bank’s key policy rate steady at 6.25 percent, saying the economy appears to be on course to meet its inflation target

Rate-setters voted unanimously for no change for the third consecutive month and in line with market expectations.

A statement following the decision said India’s growth outlook appears to be improving, as the economy recovers from the impact of last November’s shock ban on the use of 86 percent of the country’s cash.

After falling steadily for six months, India’s inflation ticked upwards in February to 3.7 percent, driven partly by rising prices of food items like fish, meat and milk products, and rising international fuel prices.

The central bank targets price growth of 4 per cent within a two percent band.

In its statement, the MPC said inflation would average 4.5 percent in the first half of the current financial year – which began on April 1, and would rise to 5 percent in the second half.

Copyright The Financial Times Limited 2018. All rights reserved.

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