Reply #7: south asia: India hikes key interest rate more than expected [View All]

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http://www.marketwatch.com/story/india-hikes-key-rate-more-than-expected-2011-07-26

MUMBAI (MarketWatch) — The Reserve Bank of India on Tuesday hiked its key lending interest rate by a larger-than-expected half percentage point to 8%, as it tries to tame what it says are mostly demand-led inflation pressures.

The move marked the 11th time the central bank has hiked interest rates since March 2010.

The RBI also lifted its forecast for benchmark wholesale inflation by the end of March 2012 to 7%, up from 6% previously. However, it maintained its forecast for growth of 8% in the current fiscal year.

“Considering the overall growth-inflation scenario, we determined that it is necessary to persevere with the anti-inflationary stance,” RBI governor Duvvuri Subbarao said in the central bank’s quarterly policy review.