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| Version 0 | Version 1 |
|---|---|
| Indian interest rates rise to 9% | Indian interest rates rise to 9% |
| (about 2 hours later) | |
| India's central bank has increased its key interest rate to 9% from 8.5% in a bid to dampen surging inflation. | India's central bank has increased its key interest rate to 9% from 8.5% in a bid to dampen surging inflation. |
| It is the third time in two months that Indian interest rates have risen and further rate rises are feared. | It is the third time in two months that Indian interest rates have risen and further rate rises are feared. |
| Inflation is running at a 13-year-high, driven by the soaring cost of food and fuel which is biting into the spending power of India's poor majority. | Inflation is running at a 13-year-high, driven by the soaring cost of food and fuel which is biting into the spending power of India's poor majority. |
| Many Asian countries are facing the same problem, threatening to curb rapid economic growth. | Many Asian countries are facing the same problem, threatening to curb rapid economic growth. |
| This year the Indian economy has been growing by over 8% a year. | This year the Indian economy has been growing by over 8% a year. |
| The Indian Reserve Bank also raised the level of minimum cash reserves banks must hold in relation to customer deposits to discourage lending. | The Indian Reserve Bank also raised the level of minimum cash reserves banks must hold in relation to customer deposits to discourage lending. |
| India's main stock index, the Sensex, tumbled after the rate rise on worries that car and home loans will become more expensive, slowing consumer spending. | India's main stock index, the Sensex, tumbled after the rate rise on worries that car and home loans will become more expensive, slowing consumer spending. |
| It fell 606 points, or 4.2% , to 13,743 points. | It fell 606 points, or 4.2% , to 13,743 points. |
| Pakistan's benchmark share index also fell. The country's central bank raised its main interest rate to 13% from 12% as part of its efforts to bring inflation back to target levels. | |
| Main priority | Main priority |
| India's government is keen to tackle inflation as it prepares to fight an election due in the first half of next year. | India's government is keen to tackle inflation as it prepares to fight an election due in the first half of next year. |
| It has cut import duties on crude oil and steel products, which are seen to be largely to blame for forcing up the prices of other goods. | It has cut import duties on crude oil and steel products, which are seen to be largely to blame for forcing up the prices of other goods. |
| The government has also cut exports of rice to try to keep prices down. | The government has also cut exports of rice to try to keep prices down. |
| But interest rates are still expected to go higher, even if growth suffers as a result. | But interest rates are still expected to go higher, even if growth suffers as a result. |
| "Bringing down inflation from the current high levels and stabilising inflation expectations assumes the highest priority in the stance of monetary policy," the Indian Reserve Bank said in a statement. | "Bringing down inflation from the current high levels and stabilising inflation expectations assumes the highest priority in the stance of monetary policy," the Indian Reserve Bank said in a statement. |