India's central bank has raised its key interest rate by half a percentage point. It's a bid to tackle both the depreciation of the rupee against the dollar and high inflation.

The Reserve Bank of India set the policy rate at 5.4 percent on Friday. It was the third consecutive rate hike since May, when the rate went up for the first time in three years and nine months.

The Indian rupee has weakened against the dollar and in mid-July hit its weakest-ever level. That is due to the US central bank's aggressive rate hikes.

India's annual inflation remained above 7 percent in June. That figure tops the central bank's upper tolerance level of 6 percent.

RBI Governor Shaktikanta Das says surging food and energy prices are destabilizing people's lives in emerging countries. He says the bank will focus on bringing the inflation rate within its target.