The Reserve Bank of India (RBI) kept interest rates unchanged on Thursday, indicating rate cuts may be a long way off as it concentrates on the "last mile of disinflation" towards the medium-term target of 4%.

The central bank's monetary policy committee held the key repo rate at 6.50% for the sixth consecutive meeting. The RBI hiked rates by 250 basis points between May 2022 and February last year.

A total of 59 of the 60 economists polled by Reuters between 10 January and 1 February forecast the central bank would hold rates steady.

In his statement, RBI governor Shaktikanta Das said monetary policy must continue to be actively disinflationary.

"The last mile of disinflation is always the most challenging and that has to be kept in mind. Stable and low inflation at 4% will provide the necessary bedrock for sustainable economic growth."

Five out of six members of the monetary policy committee voted in favour of the rate decision, as well as the monetary policy stance of 'withdrawal of accommodation,' which also remained the same, Reuters reports.

Just one member voted for a 25-basis point rate cut and a neutral stance.

Economists predict the Reserve Bank will delay rate cuts until the second half of this year.

"The central bank is likely to change its stance in the first quarter of 2024-25 and start its rate cut cycle only by the second quarter," stated Sakshi Gupta, principal economist at HDFC Bank.

"However, the chances of rate cuts coming in later than expected rather than sooner are increasing, given the RBI's cautiousness on inflation," Gupta added.

India's economy is forecast to grow 7.3% in the year ending 31 March 2024, whilst the RBI predicts growth of 7% in 2024/25, in line with the forecast set by the federal government.