India's Central Bank ups interest rate to fight inflation

New Delhi

INDIA'S central bank raised its benchmark interest rate to the highest in two years as it stepped up efforts to curb inflation and stem capital outflows.

Five of the six members of the monetary policy committee voted to raise the repurchase rate by 25 basis points to 6.5 per cent, with Ravindra Dholakia the only one opposing it, the Reserve Bank of India said in a statement on Wednesday. The decision was in line with the forecasts of 40 of the 53 economists in a Bloomberg survey. The committee kept the policy stance neutral.