India raises policy rate by 25 bps in first hike in nearly four years

By Jaspreet Kalra and Abinaya V MUMBAI, Oct 7 (Reuters) The Indian central bank raised its benchmark repo rate by 25 basis points ​to 5.5% on Wednesday, marking the ‌first rise in nearly four years amid mounting inflation and strong economic growth. India has joined major central banks in raising rates as higher oil prices triggered by the ‌Iran ​war fuel inflation, squeeze purchasing ⁠power and weigh on ⁠currencies. Weak monsoon rains linked to El Niño have compounded price pressures in Asia s third-largest economy. The six-member rate panel voted unanimously in favour ​of the rate hike. The monetary policy stance was changed to calibrated tightening from neutral . It is clear ⁠that the outlook for inflation ⁠is no longer benign, Governor Sanjay ​Malhotra said in his policy address. Nearly 60% of economists ​in a Reuters poll expected a 25 bps ‌increase in the repo rate. Consumer inflation accelerated in August to 4.82% from a year earlier, above the Reserve Bank of India s 4% me