RBI Governor Sanjay Malhotra on Wednesday announced the central bank’s first rate hike in nearly four years, but market analysts said the shift to ‘calibrated tightening’ amid a challenging global geopolitical backdrop was the bigger takeaway, as the hike was already priced in.
The Reserve Bank of India (RBI) decided to increase its benchmark repo rate by 25 basis points to 5.5%, as India joined the global rate-tightening wave amid mounting inflationary pressures triggered by the raging Middle East conflict. The Indian central bank shifted its stance from ‘neutral’ to ‘calibrated tightening’ and dismissed hopes of near-term rate cuts.
