RBI Raises Repo Rate to 5.50% Amid Inflation Concerns

The Reserve Bank of India raised the repo rate by 25 basis points to 5.50%, marking its first increase in nearly four years. The decision came as inflation concerns mounted due to higher crude oil prices and weaker agricultural output affecting supply-side pressures.

The central bank's Monetary Policy Committee cited robust economic growth exceeding expectations as another factor prompting the policy shift. Global interest rate movements and narrowing yield differentials have also pressured capital flows into emerging markets, influencing the RBI's stance.

The rate adjustment signals a shift in monetary policy direction as the RBI balances growth support with rising inflation risks in the economy.