India rate panel puts focus on inflation as global risks mount

India's inflation risks have risen, while the downside impact on growth from the government's ongoing demonetization drive will be transitory, according to the minutes of the central bank's monetary policy committee (MPC) meeting released on Wednesday.

The minutes from the Reserve Bank of India's two-day meeting on December 6-7, which saw all six MPC members voting in favor of keeping the rates unchanged, also showed a clear shift in the central bank's stance toward achieving its 4 percent inflation target in the medium-term and a more immediate 5 percent target by March.

"Achieving the inflation target... remains the primary objective," RBI Governor Urjit Patel said in the minutes.

Most members expressed concerns over the rising global crude oil prices on inflation back home and the slow pace of lending rate cuts by banks so far, despite the 175 basis points in rate cuts by the RBI since January 2015.

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