NEW DELHI (AP) — India’s central bank raised its key interest rate to tame stubbornly high inflation and cut its economic growth forecast.

The announcement of a quarter percentage point increase in the lending rate Tuesday to 8 percent sent Indian stocks lower. That added to losses accumulated during a sell-off in emerging markets that began late last week.

The Reserve Bank of India cut its economic growth forecast for the fiscal year ending March to 4.6 percent from 5 percent.

But it predicted the economy could recover to 5-6 percent growth in the year ending March 2015 provided the global economy improves, inflation eases and investment projects worth more than $63.5 billion move ahead.

The bank last month left lending rates unchanged despite high inflation.