The Reserve Bank of India decided to leave its benchmark interest rates unchanged for the sixth straight session on Thursday as inflation tends to remain in the upper band of the target range.

The Monetary Policy Committee of the RBI, led by Governor Shaktikanta Das, voted 5-1 to hold the repo rate at 6.50 percent.

The central bank has lifted the key rate by 250 basis points since May 2022 to contain inflationary pressures.

At the three-day meeting, the MPC also voted 5-1 to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

"The current setting of monetary policy is moving in the right direction with growth holding firm and inflation trending down to the target," the statement said.

"Therefore, much has been achieved, but we must remain vigilant," the bank said.

In December, inflation rose to 5.7 percent, which was close to the upper band of 2-6 percent tolerance band.

The governor projected headline consumer price inflation to be 5.4 percent in the current fiscal year, unchanged from the previous outlook. For 2024-25, inflation is seen at 4.5 percent.

The economic growth for 2023-24 was pegged at 7.3 percent on strong investment activity. Real growth is projected at 7.0 percent in 2024-25, with risks evenly balanced.

The statement suggests that there is little chance of imminent policy loosening, Capital Economics' economist Shilan Shah said.

The monetary policy easing is unlikely to materialize until the second half of the year as the economy is holding up well and inflation to remain above the 4 percent target for a few more months, Shah noted.

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