India’s central bank hikes rates for the first time since 2023 as inflation creeps up

The Reserve Bank of India on Wednesday raised interest rates for the first time since 2023, joining several major central banks in tightening monetary policy to arrest accelerating inflation. The central hiked the benchmark repo rate by 25 basis points to a 1-year high of 5.50%, in line with expectations of economists polled by Reuters. The hike comes as retail inflation in India has been on the rise for 10 straight months , touching 4.8% in August, higher than the RBI's medium term target of 4%. HSBC and Goldman Sachs expect the RBI to raise interest rates in December as well. The markets need to see a "credible" hike from India's central bank that shows its ability to raise rates again to contain inflation, HSBC said in a report on Monday.