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India’s Central Bank Raises Key Lending Rate

@otuslive

THE Reserve Bank of India has raised its key lending rate, the repo rate, by 25 basis points for the first time in four years due to concerns over inflation.

RBI’s monetary policy committee increased the policy repo rate to 6.25 per cent, the reverse repo rate adjusted to 6 per cent, and the marginal standing facility rate to 6.5 per cent.

This was the first raise since January 2014 and the first change since the last cut in August 2017.


Rising global oil prices and a weak rupee have led to inflation worries. “The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 per cent on a durable basis,” the central bank said in a statement.

India’s consumer inflation was 4.6 per cent in April, higher than RBI’s target of 4 per cent for the sixth straight month.

The central bank has also kept the GDP growth for 2018-19 at 7.4 per cent as in the April policy.

#RBIPolicy: WHAT THEY SAID

Secretary DEA Subhash Chandra Garg

RBI Deputy Governor Viral Acharya

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