New Delhi: reserve Bank of India (RBI) on Wednesday raised the key repo rate by 50 basis points (bps) to 4.90 per cent to check rising inflation in the country.
Retail inflation, which hit an eight-year high in April, remained above the central bank’s tolerance limit for the fourth month in a row, and is likely to remain elevated.
Amid rising inflationary pressures in India, the RBI had hiked the repo rate by 40 bps in an off-cycle move at a surprise meeting of the MPC in May.
The rate hike comes after 11 consecutive occasions when the central bank kept policy interest rates unchanged.
The RBI last revised the policy rate on May 22, 2020, to meet demand by cutting interest rates historically in the wake of uncertainty around the COVID-19 pandemic.
RBI has cut the repo rate by 250 basis points from February 2019 to help revive the growth momentum. The MPC has long taken a liberal stance to support development.
Retail inflation, which hit an eight-year high in April, remained above the central bank’s tolerance limit for the fourth month in a row, and is likely to remain elevated.
Amid rising inflationary pressures in India, the RBI had hiked the repo rate by 40 bps in an off-cycle move at a surprise meeting of the MPC in May.
The rate hike comes after 11 consecutive occasions when the central bank kept policy interest rates unchanged.
The RBI last revised the policy rate on May 22, 2020, to meet demand by cutting interest rates historically in the wake of uncertainty around the COVID-19 pandemic.
RBI has cut the repo rate by 250 basis points from February 2019 to help revive the growth momentum. The MPC has long taken a liberal stance to support development.