Ammon News - India's central bank hiked interest rates Wedneday for the first time since 2023 as the Middle East conflict stokes inflation in Asia's third-largest economy and batters a weakened rupee.

The Reserve Bank of India (RBI) said the benchmark repurchase rate, the level at which it lends to commercial banks, would be raised by 25 basis points to 5.50 percent after a unanimous vote by a six-member panel.

In doing so, the RBI shifted gears to join several central banks around the world who have raised rates to curb price rises or boost their currencies.

Since the outbreak of the Iran war in February, the RBI has stood pat as it waited to assess the impact of volatile oil prices on the world's fastest-growing major economy.

But resilient GDP growth last quarter has allowed it to focus on higher costs in a country that imports most of its energy and has been hit by a weak monsoon that could result in a spike in food prices.

AFP