India’s central bank raises interest rates to control inflation | Your money

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NEW DELHI (AP) — India’s central bank raised its key rate from 4.4% to 4.4% on Wednesday in an attempt to contain rapidly 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 containing the crisis. inflation.

India’s consumer price index rose from 6.1% in February to 7% in March, largely reflecting rising costs of coal, oil and food imports. Das cited global shortages of wheat and edible oil as factors.

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

He expressed concern that the deteriorating global situation during the war in Ukraine was causing a “tectonic shift” in commodity markets, trade and financial ties.

“Looking ahead, further rate hikes appear to be nailed in. After all, the rise in headline inflation has yet to continue,” Capital Economics’ Shilan Shah said in a report.

In 2020, the RBI cut its benchmark rate – the interest the central bank charges on loans to commercial banks – from 5.1% to 4%, the lowest level since March 2010, to ease funding concerns. during the pandemic.

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