Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

India's central bank raises interest rate to tame inflation

India’s central bank has raised its key interest rate to 4.4% from 4% to try to contain fast-rising inflation

Via AP news wire
Wednesday 04 May 2022 11:45 BST
India Economy
India Economy (Copyright 2022 The Associated Press. All rights reserved)

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 4.4% from 4% to try to contain fast-rising inflation.

Reserve Bank of India Governor Shaktikanta Das said after an unscheduled meeting of the bank's monetary policy committee that the central bank would maintain an “accommodative" stance to help support the economy while keeping inflation in check.

India's consumer price index surged to 7% in March from 6.1% in February, largely reflecting higher costs for imports of coal, oil and food. Das mentioned global shortages of wheat and edible oil as factors.

The RBI has set a medium-term target for CPI inflation of 4% within a band of plus or minus 2%, Das said.

He expressed concern that the deteriorating global situation amid the war in Ukraine was causing a ``tectonic shift'' in commodity markets, trade and financial linkages.

“Looking ahead, further rate hikes look nailed on. After all, the rise in headline inflation has further to run," Shilan Shah of Capital Economics said in a report.

In 2020, the RBI cut its benchmark rate — the interest the central bank charges on lending to commercial banks — from 5.1% to 4%, the lowest level since March 2010, to ease financing woes during the pandemic.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in