India lifts interest rates in face of runaway inflation

NEW DELHI - As widely expected, the Reserve Bank of India has lifted its benchmark repurchase rate by 25 basis points to 7.75%. The RBI offered what ANZ Bank described as an eloquent rationale for today’s policy action noting that “it is important to break the spiral of rising price pressures in order to curb the erosion of financial saving and strengthen the foundations of growth”. Still, ANZ said, more needs to be done and the bank is anticipating a terminal repurchase rate of 8.0%.

ANZ said RBI Governor Rajan continues to take aim fair-and-square at inflation.