India’s central bank raised its policy rate in a bid to curb high inflation.
Reserve Bank of India Gov. Shaktikanta Das said Friday that the monetary-policy committee decided to increase its policy repo rate by 50 basis points to 5.90%.
Five of the seven economists surveyed by The Wall Street Journal had expected the central bank to raise the repo rate by half a percentage point, while the other two expected a 30-basis-point increase.
Some economists said sticky domestic inflation and continued aggressive tightening by major central banks warranted the front loading of rate increases.
India’s consumer-price index in August increased 7.0% from a year earlier, above the central bank’s inflation target range of 2% to 6%.
The rupee has been renewing record lows against the dollar in recent sessions. It was recently trading around 81.60 rupees against the dollar.
Central banks around the world have been raising rates in recent months following years of policy stimulus, in order to contain a surge in inflation caused by a recovery from the Covid-19 pandemic and the Russia-Ukraine war.
The RBI raised its policy rate by 50 basis points each in August and June, following a 40-basis-point increase at an off-cycle meeting in May.
Write to Kosaku Narioka at firstname.lastname@example.org