RBI Raises Rates for First Time in Four Years, Signals Further Tightening

The Reserve Bank of India raised interest rates for the first time in four years as inflation worsened and the currency depreciated, joining other Asian central banks in tightening monetary policy. The Monetary Policy Committee voted unanimously to increase the benchmark rate by 25 basis points to 5.5%, aligning with most economists' predictions from Bloomberg surveys. This marks the first rate hike since Sanjay Malhotra became governor in December 2024. The RBI shifted its monetary policy stance from 'neutral' to 'calibrated tightening', signaling potential further rate hikes ahead.