more about the timing in the next several days than what the direction or amount is going to be.
By Cherian Thomas
June 11 (Bloomberg) -- India's central bank raised interest rates for the first time in 15 months, the latest in a global wave of monetary tightening to combat a surge in inflation sparked by food and energy costs.
The Reserve Bank of India increased the repurchase rate to 8 percent from 7.75 percent, according to a statement in Mumbai. The move came seven weeks before the bank's next scheduled monetary policy meeting on July 29. Reserve Bank Governor Yaga Venugopal Reddy joins central bankers in the Philippines, Vietnam and Indonesia in raising borrowing costs this month. The urgency signals Reddy's concerns on inflation after India raised fuel prices at the sharpest pace in at least six years.
``If inflation is heading into double digits, it would have been impossible for the central bank to ignore that,'' said Robert Prior-Wandesforde, senior economist at HSBC Holdings Plc in Singapore. ``Particularly with inflation being so sensitive a subject politically in India.''
Lehman Brothers Holdings Inc., Standard Chartered Bank and ICICI Securities Ltd. expect India's inflation rate to rise to 9.5 percent, the highest since 1995. Inflation is currently at
8.24 percent, near a four-year high. The changes in fuel prices announced on June 4 will be reflected in price data due for release on June 20.