India hikes interest rates by a quarter point
MUMBAI (MarketWatch) — The Reserve Bank of India on Thursday said it hiked both its lending and borrowing interest rate by 25 basis points, to 6.75% and 5.75% respectively. The move was in line with expectations. The central bank also lifted its March whole price index-based inflation forecast to 8% from 7% previously, citing pressures from rising crude oil, petroleum, and coal prices, as well as from the manufacturing sector. The RBI also said it would maintain its current inflation-fighting stance. Thursday’s move aimed to contain inflationary pressures from the demand side of the economy and to limit risks to growth. In February, inflation rose more than economists expected due to pressures from energy prices and the manufacturing sector, while food prices remained high. In Mumbai, stocks saw losses accelerate after the RBI’s announcement. The Sensex was down 81.41 points, or 0.5%, at 18,277.21, well off a session high of 18,354.27.
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