India announces 6th lending rate hike in 9 months to curb inflation
New Delhi, Feb 8 (EFE).- India on Wednesday announced a hike in lending interest rate by a quarter percentage point to keep the rising inflation contained in the next fiscal year.
The Reserve Bank of India’s monetary policy panel decided “to increase the interest rate policy by 25 basis points to 6.50 percent, with immediate effect,” RBI director Shaktikanta Das told reporters.
It is the sixth consecutive hike by the central bank since last May.
The bank has raised the interest rate by 250 basis points since then as it moves past the accommodative policies India implemented during the coronavirus pandemic crisis.
Das said the monetary policy panel also decided by a majority of 4 out of 6 members to “remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.”
India has a medium-term inflation target of 4 percent with a 2 percent band for the Consumer Price Index (CPI).
He said the bank announced the measures as the global economic outlook did “not look as grim now as it did a few months ago.”
“Growth prospects in major economies have improved, while inflation is on a descent, though it still remains well above the target in major economies,” he said.
However, he warned that the situation remained “fluid and uncertain.”
The bank governor said that amidst the volatile global developments, the Indian economy remained resilient, with real GDP growth estimated at 7.0 percent in 2022-23. EFE