India’s central bank raises interest rate by 0.35% as inflation begins to slow

The Reserve Bank of India (RBI) has raised its key interest rate (repo rate) by 0.35% to 6.25%, marking the fifth consecutive rate hike this year. It is believed that inflation may have peaked and there are renewed concerns about economic growth.

The RBI also raised the standing deposit facility rate and the margin standing facility (MSF) rate by 0.35% to 6.00% and 6.50%, respectively.

Inflation calculated using India’s retail sales slowed to 6.77% in October, the lowest level in three months, due to a drop in food prices. This led analysts to expect the RBI to hold off on raising the key interest rate after it had risen 0.50% in the previous three meetings.

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