New Delhi, Oct. 7 -- The Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 5.5% on Wednesday and changed its monetary policy stance to "calibrated tightening", as the central bank assessed rising inflation risks and a challenging global environment. The Monetary Policy Committee kept its options open for either a further rate hike or a pause, depending on how economic conditions evolve.

Beyond the rate decision, RBI Governor Sanjay Malhotra's policy statement offered a detailed assessment of India's financial position. Foreign direct investment has strengthened, bank credit is growing at a faster pace and foreign exchange reserves remain high.

At the same time, foreign portfolio investors have continued to withdraw ...