RBI wary of upside risks for inflation despite fall in price pressures

The Reserve Bank of India is still wary of upside risks for inflation despite a sharp fall in price pressures in February, prompting the monetary policy committee to keep rates on hold while retaining its "neutral" stance, Governor Urjit Patel said on Thursday.

"The inflation print for February did turn out to be softer than our projection," Patel told reporters after announcing the monetary policy statement.

"However, MPC looks ahead. We noted there are several uncertainties around the baseline inflation path which is why we kept the stance neutral and rate unchanged."

Inflation risks included a proposed increase in the minimum purchase price of foodgrains, fiscal slippage worries and volatility in global crude oil prices, he added.

The Reserve Bank of India kept its policy rates on hold for the fourth straight meeting and toned down its inflation rhetoric, cheering markets as inflationary pressures eased more than expected.