The Strategist

Indian Central Bank raises key rate for the second time in a row

06/09/2022 - 02:54

The country's central bank, the Reserve Bank of India, upped its benchmark interest rate for the second time in a row, raising the rate by 50 basis points to 4.9 percent, according to its chairman Shaktikanta Das.

In a statement, Das said: "The Monetary Policy Committee unanimously voted to hike the repo rate by 50 basis points to 4.90 percent."

The decision to raise the rate was made "due to inflationary pressures," he noted.

India's central bank also boosted its inflation forecast for 2022-23 from 5.7 percent to 6.7 percent, while keeping its GDP growth forecast for 2022-23 at 7.2 percent, according to Das.

In early May, India's central bank increased its key interest rate by 40 basis points to 4.4 percent. It was the first increase in the repo rate since August of last year. Rising inflation, geopolitical tensions, high crude oil prices, and commodity shortages throughout the world have all had an influence on the Indian economy.