The Reserve Bank of India's (RBI) decision to raise the policy rate was part of a coordinated operation by central banks, said Union Finance Minister Nirmala Sitharaman, who added that it was only surprising since it occurred between two monetary policy reviews.
"Many people were surprised by the time, but the act people thought should have been done anyhow - to what amount could have differed," she remarked on Sunday at The Economic Times Awards for Corporate Excellence in Mumbai. "It was unexpected because it occurred in the middle of two monetary policy reviews."
Governor of the Reserve Bank of India Shaktikanta Das announced on Wednesday that the central bank's Monetary Policy Committee (MPC) raised the repo rate by 40 basis points (bps) to 4.40 percent with immediate effect in an off-cycle meeting.
The repo rate is the interest rate at which the central bank lends banks short-term funding. Since February 2019, the RBI has lowered the repo rate by 250 basis points to help the economy recover. The Monetary Policy Committee has been accommodative for a long time in order to boost growth.