Reserve Bank of India raises key policy rate by 50 basis points

BENGALURU: The Reserve Bank of India’s key policy repo rate was raised by 50 basis points on Friday, the third increase in as many months to cool stubbornly high inflation.

With June retail inflation hitting 7%, economists polled by Reuters had expected another rate hike, but views were widely split between a 25-bp move or a 50-bp increase.

The monetary policy committee (MPC) raised the key lending rate or the repo rate to 5.40%.

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The Standing Deposit Facility rate and the Marginal Standing Facility rate were accordingly adjusted higher by the same quantum to 5.15% and 5.65%, respectively.