India hikes interest rates 12th time in fight against inflation
An Indian fruit seller weighs apples outside a wholesale market in Mumbai on September 14, 2011. Indian inflation rose closer to double-digits in August, official figures showed, piling pressure on the central bank to hike interest rates again despite a slowing economy. Annual inflation, according to the benchmark wholesale price index, the country’s most widely watched cost-of-living measure, jumped by more than half a percentage point to 9.78 percent in August from July’s 9.22 percent.
The Reserve Bank of India (RBI) raised the repo rate by 25 basis points on Friday to 8.25% and hiked the reverse repo rate by 25 basis points to 7.25%, the Economic Times reports.
This was the 12th rate hike in 18 months, the paper said, quoting analysts as saying this would likely be the last such boost for some time.
India's annual inflation surged to 9.78 per cent for the month of August, its highest in over a year, driven by rising prices for food and manufactured products, according to the Economic Times.
Notably, the central bank's move came only a day after Finance Minister Pranab Mukherjee said inflation had already peaked and would now moderate gradually, according to the Times of India.
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