NEW DELHI (AP) — India’s central bank has raised its key interest rate to 4.9% from 4.4% to contain fast-rising inflation. Wednesday’s increase follows a 40 basis points rise in May that was meant to keep price increases in check. Reserve Bank of India Gov. Shaktikanta Das said the decision was aimed at curbing inflation and mitigating the impact of geopolitical tensions, like the war in Ukraine, on the Indian economy. The central bank raised its inflation projection for 2022-23 to 6.7% from 5.7% and kept its growth forecast for the year at 7.2%. India’s retail inflation surged to 7.79% in April, largely driven by rising fuel and food prices. The price spikes are hurting consumer spending.
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