IMF welcomes RBI decision to hike interest rates

"We welcome the Reserve Bank of India's decision to increase the policy rate by 25 basis points," IMF Spokesman Gerry Rice told reporters during his bi-weekly news conference here.

In the context of rising inflation and additional upside risks to the forecasts due to higher oil prices, exchange rate depreciation and other domestic factors, the IMF thinks that this was an appropriate step by the RBI on Wednesday, Rice said.

He was responding to a question on the decision of the RBI to increase the interest rate for the first time in the last four years.

It was in January 2014 that the RBI had increased the repo rate to eight per cent to keep the inflation under check.