India Central Bank Raises Rate to Rein in Inflation

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By Kosaku Narioka

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India’s central bank raised its policy rate in a bid to tame elevated 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 5.40%.

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Four of the six economists polled by The Wall Street Journal had projected the central bank to raise the repo rate by half a percentage point, while the other two expected a 35-basis-point increase.

India’s consumer-price index in June rose 7.01% from a year earlier, compared with a 7.04% increase in May and the central bank’s inflation target range of 2% to 6%.

The war between Russia and Ukraine has disrupted supply chains and added to inflationary pressure, prompting major central banks to raise rates in recent months.

The Indian central bank raised its policy rate by 50 basis points to 4.90% in June following a 40-basis-point increase at an off-cycle meeting in May.

Write to Kosaku Narioka at [email protected]

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Credit: www.marketwatch.com /

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