RBI raises interest rates for fourth straight month

INDRANIL MUKHERJEE AFP MUMBAI - The Reserve Bank of India's benchmark repo rate was raised by 50 basis points on Friday, the fourth straight increase in the current cycle, as policymakers tried to tame the above-target retail inflation rate.

The key lending rate or repo rate was raised by the monetary policy committee MPC, consisting of three members from the RBI and three external members, to 5.90 percent with a five out of six majority.

The standing deposit facility rate and the marginal standing facility rate were also increased by the same quantum to 5.65 percent and 6.15 percent.

The US Federal Reserve'sFederal Reserve's relentless and aggressive interest rate hikes over the past few months have sent the rupee down sharply and prompted most economists to predict another 50 bps increase. The MPC has raised rates by 140 bps in the last three meetings, including consecutive 50 bps moves in the last two.

READ MORE: Fed delivers another big rate hike, Powell vows to 'keep at it' as a result of it.

India's annual retail inflation rate jumped to 7 percent in August, due to the surge in food prices, and has stayed above the RBI's mandated 2 -- 6 percent target band for eight consecutive months.