New Delhi, Sept 30 (KNN) The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday announced a hike in its key lending rate by 50 basis points to 5.90 per cent.

After a 40 basis points increase in May, and 50 basis points hike each in June and August this is the fourth consecutive rate hike.

To tame domestic retail inflation the central bank since May has raised the benchmark rate by 1.90 per cent.

The rates for the standing deposit facility and the marginal standing facility were also raised by 50 basis points to 5.65 per cent and 6.15 per cent, respectively.

RBI Governor Shaktikanta Das said inflation was expected to remain elevated at around 6 per cent in the second half of this fiscal year, suggesting price pressures would remain higher for a longer period than previously expected.

"If high inflation is allowed to linger, it invariably triggers second-order effects and unsettled expectations. The RBI to remain focused on the withdrawal of the accommodative monetary policy," he added.

Das further said that economic activity in India remains stable as high-frequency data for the September quarter indicates economic activities remain resilient, private consumption was picking up and the Monetary policy must remain alert and nimble.  (KNN Bureau)