Asia Bizz: After much speculation, RBI’s credit policy has seen a hike in interest rates. Reserve Bank of India (RBI), the primary and central bank of India, took a shocking decision on Thursday and increased the country’s interest rates by almost 25 bps.The chief reasons for the interest rates to rise, as per experts, is because the inflation level in the country went up strongly during the previous month. Repurchase points were hiked to 6.75%.
The announcement in accordance to the hike of interest rates was announced on the bank’s official website on Thursday afternoon. During the month of February, the inflation in the country rose to 8.31% and this became a point of concern to the country’s chief economists.
Considering the performance of other Asian markets today, especially after the commencement of the year, the RBI has decided to increase the borrowing rates in the country. For the governor of the RBI, this is the eight time in his term that he is announcing an “anti- inflationary monetary stance”. As of now the central bank is aiming to keep the inflation in the country around 4-4.5%.
MonetaryÂ policiesÂ across other Asian countries including China and Thailand have been tightened to deal with increasing prices.