The Reserve Bank of India (RBI) on Wednesday raised its key lending rate (also known as the repo rate) by 40 basis points with immediate effect. The central bank also increased the cash reserve ratio (CRR) by 50 basis points. The decision was made by the monetary policy committee (MPC) in its off-cycle meeting held May 2-4 with the central board.
RBI Governor Shaktikanta Das made a surprise announcement on Wednesday of hiking repo rates by 40 basis points and taking it to 4.40%. He cited increasing inflation, geopolitical tensions and spiralling commodity prices as key reasons behind the move.