Geoffrey Smith 

Investing.com – The Bank became the most recent major central bank in tightening monetary policy. They raised their key repo rates by half an point to 4.90% during their regular policy meeting.

This RBI move is similar to the one taken by its counterparts over the past few weeks. It also adds to the evidence that central banks all around the globe are taking more drastic steps to curb inflation. India’s April inflation rate rose by 7.79% in April. That is well beyond the bank’s acceptable limit of 6%. 

In his policy statement, Governor Shatikanta Das put the move down largely to the consequences of Russia’s invasion of Ukraine, which has caused sharp and sustained rises in prices for food, energy, and other commodities. 

Das declared that “the war has resulted in globalization” of the inflation. It is not surprising that central banks have begun to reorient and recalibrat their monetary policies. The increased market volatility, the monetary policy changes in advanced countries and spillovers are causing greater problems for emerging market economies. 

Over 4% has been lost by the compared to the dollar in the first quarter of this year. However, 0.3% had recovered the Federal Reserve’s policy to tighten its policy and trade at 77.699.