http://online.wsj.com/article/SB10001424127887324492604579086351393717352.html
India's central bank Friday surprised markets by raising its key
lending rate for the first time in two years, demonstrating its
commitment to fighting inflation even as the country struggles with a
slowdown and a world-wide selloff in emerging-market assets.
The Reserve Bank of India increased the rate at which it lends to
banks overnight by a quarter percentage point to 7.5%. The central bank
hasn't raised that rate, called the repo rate, since October 2011.
In his first monetary policy meeting as governor of the RBI, Raghuram
Rajan, a former International Monetary Fund economist, made it clear
that tackling India's sticky inflation was his top priority.
While the surprise step hammered markets, Mr. Rajan played down the
impact of the repo rate increase, saying keeping inflation in check
would lead to sustainable growth and a stable local currency in the long
run.
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