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.
The central bank projects the economy to expand 6.8% in the year that began in April, down from its previous view of 7.0% growth, and expects annual inflation of 6.7%, unchanged from its previous forecast, Mr. Das said.
He said that despite the downward revision, the growth projection is very strong at a time when there is acute slowdown in the rest of the world, and that the problem of inflation isn't over.
"The battle against inflation has to continue," Mr. Das said.
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 firstname.lastname@example.org
(END) Dow Jones Newswires