India’s central bank left its benchmark interest rate unchanged for the ninth straight policy meeting as inflation remains above its target. 

Four of the six monetary policy committee members voted to keep the benchmark repurchase rate at 6.5% Thursday, a move predicted by all but one of the 43 economists in a Bloomberg survey. The committee, whose four-year term ends in October, also decided to retain its relatively hawkish policy stance of “withdrawal of accommodation.”

Inflation climbed to 5.08% in June, more than one percentage point above the Reserve Bank of India’s 4% target. Rising food prices have complicated the timing of rate cuts, with governor Shaktikanta Das previously warning against a premature reduction.

Food inflation remains “stubborn,” Das said in a live-streamed address from Mumbai. “Without price stability, high growth cannot be sustained.” He added that “monetary policy must continue to be disinflationary.”

India’s bonds fell with the 10-year yield rising two basis points to 6.88%. The rupee was unchanged. The benchmark NSE Nifty 50 Index extended losses after the decision, falling as much as 0.7%.

Thursday’s move comes amid central bank action in advanced economies in recent weeks that triggered huge volatility in global markets. The Bank of England reduced interest rates last week, while pressure is piling up on the Federal Reserve to start cutting rates to support the economy. 

Economists expect the RBI will likely begin easing in the final quarter of this year and probably move only once the Fed pivots.

  - Bloomberg