After the Reserve Bank of Australia, the Central Bank of India, another major central bank of the Asia-Pacific region, also decided to increase interest rates.
The bank increased its policy rate by 50 basis points to 4.90 percent. Thus, interest rates increased for the second consecutive month in India.
The expectation of economists participating in the surveys was a 40 basis point increase in interest rates.
Shaktikanta Das, Governor of the Reserve Bank of India, emphasized inflation in the meeting held online after the decision. Das stated that inflation has gone beyond the upper band of the tolerance level.
Chairman Das said that food, energy and commodity prices remained high. The bank's inflation target is in the 2-6 percent band.
Consumer inflation hit its highest level in 8 years in April, while producer inflation hit a 30-year high last month.
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