The Monetary Policy Committee of the Reserve Bank of India (RBI) today decided to increase the repo rate, key lending rates to banks, by 50 basis points to 5.4% with immediate effect. To contain inflationary pressures, the Reserve Bank of India has hiked the repo rate by 140 basis points so far since starting a tight cycle at an unscheduled policy meeting in May this year.
The repo rate was 5.15% before the pandemic hit.
Analysts expected the central bank to raise its key interest rate by anywhere between 25 basis points and 50 basis points.
Retail inflation in India has remained above 7% for the past three months, but has eased from an eight-year high of 7.79% in April.
The Indian economy has been affected by the global economic situation, RBI Governor Shaktikanta Das said.
He said that the economic reforms in India are showing signs of broadening.
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