Washington: The International Monetary Fund (IMF) on Friday welcomed the decision of the Reserve Bank of India (RBI) to increase the repo rate by 25 basis points to 6.25%.
One basis point is one-hundredth of a percentage point.
“We welcome the Reserve Bank of India’s decision to increase the policy rate by 25 basis points,” IMF spokesman Gerry Rice told reporters during his biweekly news conference in Washington.
In the context of rising inflation and additional upside risks to the forecasts due to higher oil prices, exchange rate depreciation and other domestic factors, the IMF thinks that this was an appropriate step by the RBI on Wednesday, Rice said.
He was responding to a question on the decision of RBI to increase the interest rate for the first time in the last four years. It was in January 2014 that RBI had increased the repo rate to 8% to keep the inflation under check.