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India hikes key rate for first time since 2014

Inflation fears prompt central bank to raise interest 25 basis points

Crude oil prices and expected U.S. Fed rate hikes prompt the Reserve Bank of India to raise its key interest rate.    © Reuters

MUMBAI -- The Reserve Bank of India on Wednesday raised its key interest rate by 25 basis points to 6.25% for the first time since January 2014 over fears of rising crude oil prices and spiraling inflation.

The six-member Monetary Policy Committee, headed by Reserve Bank Gov. Urjit Patel, decided to hike rates after an unusual three-day meeting. The committee was maintaining the repo rate at 6%, which was last cut in August. The decision had the unanimous vote of all members.

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