The facade of the Bombay Stock Exchange (BSE) building is seen in Mumbai, India. The Indian central bank raised its key rate to 4.4% from 4% to contain the sharply rising inflation. (AP Photo/Rafiq Maqbool, File)

NEW DELHI – India’s central bank raised its key rate to 4.4% from 4% in an attempt to contain soaring inflation.

Reserve Bank of India Governor Shaktikanta Das said after an unscheduled meeting of the bank’s monetary policy committee that the central bank would maintain an “accommodative” stance to help support the economy while containing the crisis. inflation.

India’s consumer price index rose from 6.1% in February to 7% in March, largely reflecting rising costs for coal, oil and food imports. Das cited global shortages of wheat and edible oil as factors.

The RBI has set a medium-term target for CPI inflation of 4% within a range of plus or minus 2%, Das said.

He expressed concern that the deteriorating global situation amid the war in Ukraine was causing a “tectonic shift” in commodity markets, trade and financial ties.

“Looking ahead, further rate hikes appear nailed on. After all, the rise in headline inflation has yet to continue,” Capital Economics’ Shilan Shah said in a report.

In 2020, the RBI cut its benchmark rate – the interest the central bank charges on loans to commercial banks – from 5.1% to 4%, the lowest level since March 2010, to ease funding concerns. during the pandemic.