The monetary policy statement indicates that the Indian economy continues to progress on the expected path: Kocchar on RBI move

"The monetary policy statement indicates that the Indian economy continues to progress on the expected path, with improving growth indicators and inflation contained within the targeted range. The central bank has expressed strong confidence in the government’s commitment to fiscal consolidation. As the impact of monetary policy measures taken so far play out in terms of bank funding costs, lending rates are expected to continue to moderate. Overall, macro-economic conditions are conducive for an improving growth trajectory as the various policy measures announced by the government take effect," Kochhar said in a statement.

As expected, the  Reserve Bank of India on Tuesday kept the key policy rate unchanged as the repo rate was allowed to be at 6.75 per cent and the cash reserve ration at 4 per cent.

Announcing this, RBI Governor Raghuram Rajan, however, affirmed the central bank's commitment to ease it as and when room is available. He said  inflation is likely to perform better than expected.

RBI, which is set to achieve its target of getting inflation down at 6 per cent by January and is aiming to reduce the number further to 5 per cent by March 2017, will monitor developments on the commodity prices, including food and oil and external developments in its future policy formulations, Rajan said.