RBI raise repo to 8% to Rein in Inflation

India's central bank unexpectedly raised interest rates for the first time in 15 months, joining a global wave of monetary tightening to combat a surge in inflation sparked by food and energy costs.

The Reserve Bank of India increased the repurchase rate to 8 percent from 7.75 percent from today, according to a statement in Mumbai. The move came seven weeks before the bank's scheduled monetary policy meeting on July 29.

Governor Yaga Venugopal Reddy joins central bankers in Brazil, China and Russia, the so-called BRIC nations, in raising borrowing costs. The urgency signals Reddy's concerns after India raised fuel prices at the sharpest pace in at least six years.