10:15 New York – The Reserve Bank of India raised its key interest rate by 0.25%, first interest rate increase in fifteen months.

The Reserve Bank of India raised its key interest rate this afternoon, two months ahead of its scheduled meeting on July 29. The Reserve Bank of India has increased the repo rate by 25 basis points to 8.00% from 7.75%. The reverse repo rate has been left unchanged.

The wholesale prices inflation which was 4.36% on January 12, 2008 at the time of announcement of the third quarter review increased to 7.33% on April 12, 2008 at the time of announcement of the annual review and to a high of 8.24% on May 24, 2008. The consumer price index inflation which ranged from 4.8% to 5.9% in January 2008 has increased between 7.8% and 8.9% in April 2008.