RBI raises repo rate to 5.50% to tackle inflation
Business
The RBI just bumped up its repo rate by 25 basis points, bringing it to 5.50%.
This is its way of tackling stubborn inflation and signals that more hikes, or at least no cuts, are likely for now.
The decision came out of the MPC meeting held from October 5-7.
India's August inflation hits 4.82%
Inflation hit a recent high at 4.82% in August, thanks to pricier oil, a weaker rupee (which opened at 96.42 per US dollar), and even a below-average monsoon.
After the rate hike, bond yields nudged up too.
To keep things steady in the markets, RBI says it will rely on tools like Variable Rate Reverse Repos instead of raising banks' cash reserve requirements for now.