India Raises Interest Rates for First Time in Nearly Four Years
Listen to the story
India has raised its main interest rate. This is the first rate hike in almost four years.
The central bank of India made the decision. Its name is the RBI. The RBI boss is Sanjay Malhotra.
The bank raised the repo rate by 25 basis points. This is a small but important change.
India wants to fight inflation. Inflation means prices are going up too fast.
India also has a problem with money. There is a currency crunch. This means there is not enough cash or foreign money moving easily.
Because of the hike, loans will cost more. People who pay EMIs will pay more money each month.
An EMI is a small payment people make every month for a loan.
Many countries around the world are also raising rates now. This is called a global rate-tightening wave.
A rate-tightening wave means many banks raise rates at the same time.
The RBI hopes higher rates will help control prices in India.
Vocabulary7 words
- central bank
- the main bank that controls money for a country
- repo rate
- the interest rate a central bank uses to lend money to other banks
- basis points
- a small unit used to measure changes in interest rates
- inflation
- when prices go up over time
- currency crunch
- a problem when money is hard to get or use
- EMIs
- small monthly payments for a loan
- rate-tightening wave
- many countries raising interest rates at the same time
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Quiz
Answer key
1. It raised the repo rate 2. To fight inflation 3. True
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Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
India has raised its main interest rate. This is the first rate hike in almost _____ years.
The _____ bank of India made the decision. Its name is the RBI. The RBI boss is Sanjay _____.
The bank raised the _____ rate by 25 basis points. This is a small but important change.
India wants to fight _____. Inflation means prices are going up too fast.
India also has a problem with money. There is a currency _____.
Because of the hike, loans will cost more. People who pay _____ will pay more money each month.
Many countries around the world are also raising rates now. This is called a global rate-tightening _____.
The RBI hopes higher rates will help control _____ in India.
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