India's central bank has raised its key interest rate for the second straight month in a bid to curb inflation.

Policymakers at the Reserve Bank of India increased the policy rate by half a percentage point to 4.9 percent on Wednesday. The move follows an earlier hike last month, the first in 3 years and 9 months.

India's annual inflation soared to an 8-year high of 7.8 percent in April led by higher energy and food prices. That figure topped the central bank's upper tolerance level of 6 percent.

RBI Governor Shaktikanta Das said the prolonged conflict in Europe is driving up prices around the world. He said inflation in India is rapidly expanding and has exceeded tolerable levels.

The governor gave a projection that India's inflation will stay above 6 percent level for the rest of the year, hinting at further rate hikes.