India’s central bank has announced a further increase in interest rates, surprising many analysts by moving from 5.75% to 6% in its base inter-bank lending rate as it continues in its attempts to stave off increasingly aggressive inflation.
As India feels the heat from a rampantly successful economy as it continues to emerge as a global player, the battle against inflation has called for drastic measures from the central bank, lifting interest rates for the sixth time this year in its attempts to curb upwards price pressure.
Double-digit inflation has led to a dramatic increase in the cost of living for India’s large and growing population, with many driven to industrial action and civil unrest in protest at rising costs.
However, with the Indian finance ministry dedicated to working exclusively on the implementation of anti-inflationary policies, analysts remain hopeful that the measures could halt the general rise in prices.
India’s economy continued to grow over the second quarter of the year, topping 8.8% – a quicker rate of growth than any quarter in the last two years, in spite of the interest rate increases which are designed to cool off and stabilize economic performance.
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