India surprises with 50 basis point hike
This from the FT’s Rahul Jacob in New Delhi and James Fontanella-Khan in Mumbai:
India’s central bank has raised interest rates by a higher than expected 50 basis points, signalling its determination to battle persistent high inflation.
The increase, which brings the country’s benchmark interest rate to 8 per cent, is India’s eleventh in 18 months. It comes as the economy continues to struggle with higher global commodity prices, supply-side bottlenecks that affect the prices of food, and loose fiscal policy.
The Sensex, India’s main stock index, fell 1.6 per cent following the announcement.
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