RBI Hikes key interest rate to 4.40%, first since May 2020

Reserve Bank of India (RBI) on Thursday raised key interest rate by 40 basis points to 4.40 per cent with immediate effect.

The decision was taken by the monetary policy committee (MPC) of the central bank in its off-cycle meeting held between May 2-4, RBI Governor Shaktikanta Das said.

He said the decision was taken in view of rising inflation, geo-political tensions, high crude oil prices and shortage of commodities globally, which have impacted Indian economy.

At the same time though, Mr Das said that RBI continues to remain accommodative about its stance on inflation.

In his nearly half-an-hour address, the RBI Governor noted that food Inflation is expected to remain high as spillovers from global wheat shortages are impacting domestic wheat prices, even though domestic supplies remain comfortable.