India’s central bank hikes interest rates more than expected to tame inflation

India hikes interest rates more than expected

MUMBAI, India — India’s central bank has hiked interest rates more than expected as it continues its fight against high inflation.

The Reserve Bank of India is raising the repo rate — at which it makes short-term loans to commercial banks — by a quarter percentage point to 6 percent with immediate effect. It raised the reverse repo rate — the rate at which it borrows from commercial banks — by an unexpected half percentage point to 5 percent.

Economists had expected quarter point hikes in both rates.

This is the fifth rate hike this year.

The bank says “inflation remains the dominant concern.” Average monthly inflation for the April to June period was 10.6 percent.