India's central bank on Wednesday raised a key interest rate in moves to tame inflation and maintained its growth forecast for 2022-23 at 7.2 percent.

The Reserve Bank of India's monetary policy committee raised the repo rate by 50 basis points to 4.90 percent with immediate effect.

RBI Governor Shaktikanta Das in a statement said that inflation has risen steeply "much beyond the upper tolerance level".

He said the committee would remain focused on bringing down inflation "without losing sight of the growth requirements."

Inflation in India rose to an eight-year high of 7.8 percent on year in April, up from 7 percent in March, well above the range the RBI is comfortable with. It was the fourth consecutive month when inflation touched or was above the upper tolerance level of 6 percent.

According to an analysis by the Dubai-based lender Emirates NBD, the rate hike was more aggressive expected; the consensus prediction of 40bps hike. 

“We now forecast a further 75bps of hikes through the end of the year, taking the end-2022 rate to 5.65 percent...," said Daniel Richards - MENA Economist.

India's RBI said the standing deposit facility (SDF) rate now stands adjusted to 4.65 percent; and the marginal standing facility (MSF) rate and the bank rate at 5.15 per cent.

(Reporting by Brinda Darasha; editing by Seban Scaria)