Central Banks
India Raises Cost of Borrowing to 6.5% to Tame Inflation
- Tightening bias to help tame core inflation, according to Das
- Bonds fell after dovish hike market expected didn’t happen
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India’s central bank slowed the pace of interest-rate increases while keeping the door open for further policy tightening to curb core inflation, an approach that aligns with the thinking of peers in the US and Australia.
The Reserve Bank of India’s six-member Monetary Policy Committee voted 4-2 to raise the benchmark repurchase rate by a widely expected quarter-point to 6.50%, slowing from the 35 basis-point hike in December. The panel also retained its stance of withdrawing accommodation that it adopted early last year.