Daily Mirror (Sri Lanka)

RBI raises key rate by 40 bps to tame inflation

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REUTERS: The Reserve Bank of India’s (RBI) monetary policy committee raised the key lending rate by 40 basis points yesterday, citing persistent inflationa­ry Shaktikant­a Das pressures in the economy, Governor Shaktikant­a Das announced.

The MPC raised the key lending rate or the repo rate by 40 basis points to 4.40 percent, Das said.

India’s 10-year benchmark bond yield was up at 7.41 percent after RBI raised its policy rate.

Das said that MPC would retain its accommodat­ive monetary policy stance at a time when globally inflation is rising alarmingly even as investment activity is showing some traction in the country.

“The MPC judged that the inflation outlook warrants an appropriat­e and timely response through resolute and calibrated steps to ensure that second-round effects of supplyside shocks on the economy are contained and long-term inflation expectatio­ns are kept firmly anchored,” Das said.

“In the MPC’S view, monetary policy response at this juncture would help to preserve macro-financial stability amidst increasing volatility in financial markets,” he added.

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