The move came ahead of an expected rate hike from the US Federal reserve and retail inflation threatening to turn runaway due to supply-side shocks and the Russia-Ukraine war.
“The decision today to raise repo rate may be seen as a reversal of rate action of May, 2020. In last month we had set out a stance of withdrawal of accommodation. Today’s action need to be seen in line with that action,” RBI governor Shaktikanta Das said in an unscheduled statement.