RBI raises repo rate; further near-term hike unlikely

MUMBAI (Reuters) - The Reserve Bank of India unexpectedly raised its policy interest rate on Tuesday by 25 basis points but said that if consumer price inflation eases as projected it does not foresee further near-term tightening.

The RBI raised its policy repo rate by 25 basis points to 8.00 percent. Most economists in a Reuters poll conducted last week had expected no change in rates.

However, expectations for a rate hike had increased after a central bank panel proposed to make the consumer price index the main inflation benchmark.

(Reporting by Tony Munroe and Suvashree Dey Choudhury; Editing by Jacqueline Wong)