Terms it as appropriate step in times of rising inflation
The International Monetary Fund has welcomed the decision of the Reserve Bank of India to increase the repo rate by 25 basis point to 6(point)25 percent.
IMF Spokesman Gerry Rice told this to reporters during his bi-weekly news conference in Washington. He said that the IMF thinks that this was an appropriate step by the RBI in present context of rising inflation and additional upside risks to the forecasts due to higher oil prices, exchange rate depreciation and other domestic factors.
He was responding to a question on the decision of the RBI to increase the interest rate for the first time in the last four years.
It was in January 2014 that the RBI had increased the repo rate to eight percent to keep the inflation under check.