India raises rates
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Concerns about high inflation have prompted the Reserve Bank of India (RBI) to raise interest rates for the second time in one month.
The RBI today increased its repo rate - the rate at which it lends to banks - from 5.5% to 5.75%. It also raised its reserve repo rate from 4% to 4.5%, which is twice the rise that had been forecast.
In a press statement the RBI said that even though food price inflation, and more generally, consumer price inflation, have shown some moderation, they are still in double digits. (article continues below)
“With growth taking firm hold, the balance of policy stance has to shift decisively to containing inflation and anchoring inflation expectations,” said Duvvuri Subbarao, the governor of the RBI.
