Mumbai, Oct. 7 -- The Reserve Bank of India (RBI) raised its key interest rate for the first time in nearly four years as rising inflation risks and a sharp shift in the global rate environment prompted the central bank to reverse its easing cycle.

The Monetary Policy Committee (MPC) increased the key repo rate by 25 basis points to 5.50%, Governor Sanjay Malhotra said on Wednesday. Nine of 10 economists surveyed by Mint had expected a rate hike, while only one called for a pause. This is the first increase since February 2023.The six-member rate-setting panel also decided to change the stance to 'calibrated tightening' from its 'neutral' stance earlier. The governor said that calibrating policy tightening is imperative.

Consequently, t...