Oct 7 (Reuters) – The Indian central bank raised its benchmark repo rate INREPO=ECI by 25 basis points to 5.5% on Wednesday, marking the first rise in nearly four years amid mounting inflation and strong economic growth.SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI
“(The) 25-bps (hike) was largely priced in, but the change in stance shows a de facto commitment to hike even if food or crude prices reverse.”RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“The RBI’s October hike acknowledges that cyclical inflation risks are no longer benign. A change in stance also underscored the RBI MPC’s hawkish intent. Against a backdrop of elevated oil prices, tighter global conditions, and risks to food inflation from unfavourable weather, policymakers have chosen to reinforce inflation credibility before risks become entrenched.”
Reporting by Kashish Tandon; Compiled by Dhanya Skariachan; Editing by Ronojoy Mazumdar
