India's central bank raises interest rate to fight inflation
India’s central bank has raised its key interest rate to 4.9% from 4.4% to contain fast-rising inflation
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.India’s central bank on Wednesday raised its key interest rate to 4.9% from 4.4%, the second such hike in the last three weeks to contain inflation.
Reserve Bank of India Governor Shaktikanta Das said the decision was aimed at curbing price increases and mitigating the impact of geopolitical tensions, like the war in Ukraine.
“Upside risks to inflation … materialized earlier than expected," Das said.
Wednesday’s increase follows a 40 basis points rise in May.
The central bank raised its inflation projection for 2022-23 to 6.7% from 5.7% and kept its forecast for growth this year at 7.2%.
The war in Ukraine is giving rise to "newer challenges each passing day which is accentuating the existing supply chain disruptions. As a result, food, energy and commodity prices remain elevated,” Das said.
The price spikes have impacted consumer spending, which accelerated to an eight-year high of nearly 7.8% in April, according to official data.
India’s economy expanded at a 4.1% annual pace in the January-March quarter, following 5.4% growth in the previous quarter. Overall, the economy grew 8.7% in the 2021-22 financial year, slower than the 8.9% estimated by the government.