Reserve Bank of India Raises Repo Rate 25bps to 7.50%

The Reserve Bank of India increased its repo rate by 25 basis points to 7.50% from 7.25% and raised the reverse repo rate to 6.50% by the same margin.  The Bank said: "while the Reserve Bank needs to continue with its anti-inflationary stance, the extent of policy action needs to balance the adverse movements in inflation with recent global developments and their likely impact on the domestic growth trajectory."

The Reserve Bank of India increased the repo rate by 50 basis points at its previous meeting.  India's key inflation measure, the wholesale price index, increased 9.06% in May, after rising 8.66% in April, and 8.98% year on year in March, exceeding the Bank's previous estimate of 8%.

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