India joins global rate-tightening wave with first hike in nearly 4 years
The central bank said inflation risks have increased as food and fuel prices rise and growth stays firm.
- The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5%, marking its first increase in nearly four years.
- The RBI shifted its policy stance from “neutral” to “calibrated tightening,” signaling that further rate increases remain possible if inflationary pressures persist.
- Rising global oil prices linked to the West Asia conflict, along with weak monsoon conditions, have intensified inflation risks in India.
- India’s consumer inflation rose to 4.82% in August, exceeding the RBI’s 4% medium-term target for the third consecutive month, while price pressures have broadened across the economy.
- Despite the tightening move, India’s economy remains resilient, with GDP growth reaching 7.8% in the April-June quarter and the RBI raising its full-year growth forecast to 7.1%.
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110 Articles
India joins global rate-tightening wave with first hike in nearly 4 years
India's central bank raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday, marking the first rise in nearly four years amid mounting inflation and strong economic growth.
The Indian central bank is expected to raise its interest rates this Wednesday, for the first time in almost four years. A decision that comes as inflation rises, oil is traded around $100 per barrel and rupee is close to its lowest historical level against the dollar. At the same time, foreign investors are reducing their exposure to Indian assets.
The Reserve Bank of India (RBI) has raised interest rates for the first time since 2023, raising the repo rate, the key interest rate, by 25 basis points to 5.50 percent, a one-year high, CNBC reports. The move is aimed at curbing increasingly stubborn inflation, while the Indian economy continues to expand at a remarkable pace.
The central bank responded to inflationary pressures with a rise of 25 basis points, the first since 2023
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