MUMBAI, Oct 7 — India’s central bank hiked interest rates for the first time in more than three years today as the Middle East conflict stokes inflation in Asia’s third-largest economy and batters a weakened rupee.
The Reserve Bank of India (RBI) said the benchmark repurchase rate, the level at which it lends to commercial banks, would be raised by 25 basis points to 5.50 per cent after a unanimous vote by a six-member panel.
In doing so, the RBI shifted gears to join several central banks around the world who have raised rates to curb price rises or boost their currencies.
Since the outbreak of the Iran war in February, the RBI has stood pat as it waited to assess the impact of volatile oil prices on the world’s fastest-growing major economy.
