India Central Bank Raises Rate to Rein In Inflation

By Kosaku Narioka

India's central bank increased its policy rate in a bid to contain high inflation.

Reserve Bank of India Gov. Shaktikanta Das said Wednesday that the monetary-policy committee decided to raise its policy repo rate by 35 basis points to 6.25%.

Five of the seven economists surveyed by The Wall Street Journal expected the Indian central bank to raise the policy rate by 35 basis points, while the other two projected a 25-basis-point increase.

India's consumer-price index rose 6.8% in October from a year earlier after a 7.4% increase in September, compared with the central bank's inflation target of 2% to 6%.

After years of policy stimulus, central banks around the world have been raising rates this year to contain a surge in inflation caused by the Russia-Ukraine war and the recovery from the Covid-19 pandemic.

The RBI raised its policy rate by 40 basis points at an off-cycle meeting in May, its first rate increase in nearly four years, and followed with a 50-basis-point increase each in June, August and September.

Write to Kosaku Narioka at [e-mail]

(END) Dow Jones Newswires

12-06-22 2356ET