MUMBAI (Reuters) – The Reserve Financial institution of India’s key repo price was raised by 25 foundation factors (bps) on Wednesday as extensively anticipated, the sixth straight enhance, as core inflation remained excessive regardless of indicators retail inflation has peaked.

The central financial institution stated that its coverage stance stays targeted on withdrawal of accomodation.

Most analysts anticipate this hike to be the ultimate enhance within the RBI’s present tightening cycle, which has seen it elevate charges by 250 bps since Might final yr.

The financial coverage committee (MPC), comprising three members from the central financial institution and three exterior members, raised the important thing lending price or the repo price to six.50% in a break up choice.

4 of the six members voted in favour of the choice.

In a ballot carried out forward of the federal finances on Feb. 1, greater than three-quarters of economists, 40 of 52, anticipated the RBI to lift the repo price by 25 bps. The remaining 12 predicted no change.

The annual retail inflation price eased to five.72% in December from 5.88% within the earlier month, falling under the RBI’s higher tolerance band of two%-6% for a second straight month.