"Our job is only half done, having brought inflation within the target band," Reserve Bank Governor Shaktikanta Das opined while voting for the status quo in the key policy rates along with other five members of the rate-setting panel early this month.

It was for the second time in a row that the Monetary Policy Committee (MPC) headed by the Governor kept the short-term lending rate (repo) unchanged after continuously raising it since May 2022.

As per the minutes of the MPC meeting held from June 6 to 8, Das said India’s macroeconomic fundamentals are strengthening and growth prospects are steadily improving and becoming broad-based.

Inflation, he said has eased and the external sector outlook has improved. Balance sheets of banks and corporates look resilient and healthy, thereby engendering twin balance sheet advantage for growth.

"Our job is only half done, having brought inflation within the target band. Our fight against inflation is not yet over. We need to undertake forward-looking assessment of the evolving inflation-growth outlook and stand ready to act, if situation so warrants.

"Beyond this and given the prevailing uncertainties, it is difficult to give any definitive forward guidance about our future course of action in a rate tightening cycle," he said as per the minutes.

The government has mandated the RBI to ensure retail inflation remains at 4 per cent, with a 2 per cent margin on either side. The consumer price index-based retail inflation came down to 4.25 per cent in May.

While voting for keeping the repo unchanged at 6.5 per cent, MPC member and Deputy Governor Michael Debabrata Patra said his vote for maintaining the status quo on the policy rate should be seen as taking middle stump guard to prepare for a bouncier pitch.

"Holding the rate unchanged should not be interpreted as the interest rate cycle having peaked, but as a period of careful evaluation of a decision on the extent of additional policy tightening, if needed," he said.

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