Reserve Bank of India raised the policy repo rate 25bps to 5.50% on Wednesday,
its first increase in nearly four years. The six-member rate-setting committee
voted unanimously and the RBI shifted its stance from neutral to moderately
tight. The bank cited rising inflationary pressures from an oil-price spike
linked to the Iran conflict and reduced monsoon rainfall due to El Nifio, which
have squeezed purchasing power and weighed on the currency. The governor said
the inflation outlook is no longer benign.
