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MUMBAI: The Reserve Bank of India’s key interest rate was raised by 50 basis points on Wednesday — the second hike in as many months in a bid to cool persistently high inflation.
The monetary policy committee raised the key lending rate, or the repo rate, by 50 basis points to 4.90 percent.
The Standing Deposit Facility rate and the Marginal Standing Facility Rate were adjusted higher by the same quantum to 4.65 percent and 5.15 percent, respectively.
RBI Governor Shaktikanta Das had said a June 8 move was a “no brainer.” But analysts polled by Reuters had been divided over how much it would hike, with forecasts ranging between 25 and 75 bps.
Wednesday’s increase follows a 40-bps rise in early May at an unscheduled meeting that kicked off the central bank’s tightening cycle, which economists expect to be relatively short.
Russia’s Sberbank says India, Belarus still discuss potash deal
Russia’s Sberbank said on Tuesday that Indian Potash Ltd., also known as IPL, and the Belarusian Potash Company have been in discussions about a sale deal and denied it was responsible for holding up the payments.
IPL set up a rupee account with Sberbank’s New Delhi branch in early February at the request of the Belarusian company, given steadily toughening US sanctions against Minsk since a 2020 election and a crackdown on pro-democracy protests.
According to two people familiar with the issue and a letter seen by Reuters, the Indian company complained to Sberbank that only a “negligible” part of its payment in rupees got converted into roubles. The two companies agreed that IPL would pay for Belarussian potash in rupees rather than dollars.
One of the sources told Reuters on Monday that Sberbank had not responded yet to the letter dated May 23.