India has implemented its fifth interest rate hike this year in response to rising inflation.
The Reserve Bank of India (RBI) announced on the 7th (local time) that it would raise the benchmark interest rate from 5.9% to 6.25%, an increase of 0.35 percentage points.
As a result, India has raised interest rates a total of 2.25 percentage points over five hikes in seven months, starting with a 0.4 percentage point increase in May.
However, the rate of increase has slowed. In June, August, and September, India raised the benchmark interest rate by 0.5 percentage points each time.
During the COVID-19 pandemic, India injected a large amount of money into the market to prevent an economic recession. Subsequently, inflation accelerated sharply due to the Ukraine war and US-China tensions.
The value of the rupee also fell to an all-time low, and financial market instability remains.
The international credit rating agency Standard & Poor's (S&P) recently downgraded India's economic growth forecast for this year from 7.3% to 7.0%.
Shaktikanta Das, Governor of the RBI, said, "India is still one of the fastest-growing major economies, and inflation will ease. However, the fight against inflation is not over yet."
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