Mint Explainer | Why are central banks starting to raise interest rates again? | Today’s news

What about India?

In India, interest rates moved in a different direction. The reference interest rate (repo rate) was 9% in July 2008, when the global financial crisis hit. The Reserve Bank of India (RBI), like other central banks, aggressively cut the repo rate to 4.75% by April 2009 to support growth. However, unlike the rest of the world, interest rates in India have not remained low. Inflation started rising in 2010 and in 2011 the RBI raised rates to 8.5%. When the pandemic hit in 2020, it cut interest rates sharply, only to raise them again as inflation soared. The repo rate was 5.25% at the end of 2025.