Most Recent

image

India's central bank hikes interest rate to 5.5pc

Oct 7, 2026

The Indian central bank raised its benchmark repo rate by 25 basis points to 5.5 percent on Wednesday, marking the first rise in nearly four years amid mounting inflation and strong economic growth. India has joined major central banks in raising rates as higher oil prices triggered by the Iran war fuel inflation, squeeze purchasing power and weigh on currencies. Weak monsoon rains linked to El Niño have compounded price pressures in Asia's third-largest economy. The six-member rate panel voted unanimously in favour of the rate hike. The monetary policy stance was changed to "calibrated tightening" from "neutral". It is clear that the outlook for inflation is no longer benign, Governor Sanjay Malhotra said in his policy address. Nearly 60 percent of economists in a Reuters poll expected a 25 bps increase in the repo rate. Consumer inflation accelerated in August to 4.82 percent from a year earlier, above the Reserve Bank of India's four percent medium-term target for a third consecutive month. Higher prices of fuel and food are now rippling through the economy with nearly half of the consumer basket seeing inflation above four percent. At the same time, economic growth remains strong, giving the central bank greater leeway to raise the cost of borrowing for consumers and businesses. GDP growth for the April-June quarter stood at 7.8 percent, well above the central bank's forecast of seven percent. (Reuters) Edited by Tony Sabine

Manage The Numbers

Manage The Numbers is the world’s fastest-growing finance news website, featuring the latest money and market news, along with in-depth analysis so you can make the best decision.

Newsletter