Daily Times

India’s central bank kept borrowing costs at a record low for an eleventh straight meeting, while warning of impacts from the risks of Russia’s war in Ukraine and pledging to remove some liquidity in the banking system. The Reserve Bank of India’s six-member Monetary Policy Committee voted to hold the benchmark repurchase rate at 4pc, as predicted by all 36 economists surveyed by Bloomberg. The panel decided to keep its accommodative stance, Governor Shaktikanta Das said Friday, while focusing on withdrawal of banking liquidity accommodation “to ensure that inflation remains within the target going forward while supporting growth.” A recovery in Asia’s third-largest economy is facing fresh challenges from the war in Ukraine and Covid-19 lockdowns in China, which risk exacerbating a global supply squeeze and price pressures. Das on Friday said the global economy is seeing “tectonic shifts” from the war and extreme volatility in commodity and financial markets. “Caught in the cross current of multiple headwinds, our approach needs to be cautious but proactive in mitigating the adverse impact on India’s growth, inflation and financial conditions,” Das said. India’s central bank on Friday also announced a new tool that will enable the monetary authority to soak up excess cash in the banking system as part of its liquidity normalization efforts.