The Reserve Bank of India’s Monetary Policy Committee has raised the repo rate by 25 basis points to 5.5%, marking a rate hike after nearly three-and-a-half years. The decision comes as inflationary pressures have increased amid the continuing conflict in West Asia.
RBI Governor Sanjay Malhotra said rate cuts are off the table in the near term. The central bank also revised its policy stance to “calibrated tightening” from “neutral”.
The move signals a more cautious approach from the central bank as it keeps a watch on price pressures and global uncertainty. The RBI’s latest policy position indicates that borrowing costs may stay elevated for now.
