- The RBI lifted its key policy rate by 25 basis points to 5.50%, the first increase since February 2023 and the start of a new tightening cycle.
- The central bank had held rates through 2026 even as peers in Japan, Indonesia and the Philippines hiked, prioritizing growth support.
- The shift is driven by inflation running above the RBI's target level, forcing a pivot from stimulus toward price stability.
Quotes
“The Reserve Bank of India on Wednesday raised its key interest rate by 25 basis points to 5.50%, kicking off the first cycle of rate hikes since February 2023”
“as inflation continues to accelerate beyond the central bank's target level”