The Reserve Bank of India (RBI) on Wednesday announced a 25 basis points hike in repo rate to 6.5 per cent. This the first time since October 2013 that the central bank has hiked borrowing costs at two consecutive policy meetings. Five of the six members on the rate panel voted for a rate increase. The RBI cited rising crude oil prices, volatility in global financial markets, and uncertainty around the full impact of MSP (minimum support price) on inflation among the key factors for its rate-hike decision. However, the monetary policy committee maintained its stance at neutral.
