Retail inflation rose to 4.82% in August, the third straight month that headline inflation breached the Reserve Bank of India's medium-term target of 4%. (Reuters pic)

MUMBAI: India's central bank hiked interest rates for the first time in more than three years on Wednesday 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% 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.