India hikes key rate | How are US, Europe fighting inflation

While India has gone for a repo rate hike along with other measures, top economies like the US and nations in Europe are battling the major challenge of inflation.

At a time when inflation has become a cause of concern for the US and other countries in Europe, India has taken a slew of measures to contain price rises. Reserve Bank of India (RBI) Governor Shaktikanta Das said the government was 'mindful' of the current inflation situation.

While the RBI had hiked the repo rate to tame inflation in Asia's third largest economy, the central bank governor said it is up to the Centre to take further supply-side measures to contain the price rise.

The remarks came after the RBI sharply increased its financial year 2022-2023 average consumer price inflation estimate to 6.7 per cent from the earlier 5.7 per cent, and attributed a bulk of the increase to be coming from supply side troubles, with food inflation alone accounting for three-fourths of the increase in the estimate.

The government had last month cut excise duties on fuels by Rs 9.5 per litre, reducing the pressure on the common man and input costs. It has also taken other measures like banning or, containing exports of food products like wheat and sugar.

Inflation in the US hit a 40-year high earlier this year, amid supply chain constraints caused by the global economy's recovery from the Covid-19 pandemic and Russia's invasion of Ukraine.

The inflation figure was below the four-decade high of 6.6 per cent set in March but fell marginally to 6.3 per cent in April. While high inflation is still causing hardships for millions of households, any slowing of price increases, if sustained, would provide some modest relief.

US Federal Reserve Chairman Jerome Powell has pledged to keep ratcheting up the Fed's key short-term interest rate to cool the economy until inflation is “coming down in a clear and convincing way.”