The Reserve Bank of India (RBI) unexpectedly raised its policy repo rate by 25 basis points to 7.5% due to concerns about rising inflation and anchoring inflation expectations. While cutting other rates, the RBI governor cited risks of higher inflation from supply issues and increasing administered prices. Inflation is expected to be higher by the end of the year. The RBI will prioritize monetary stability and lowering inflation expectations to achieve its primary objective. The governor signaled that future policy decisions will depend on economic data and activity.