Tuesday, May 03,
Reserve Bank Of India today raises its short term lending (repo) rate by 50 basis points to 7.25% and the saving bank rate by 50 basis points to 4% in the wake of high inflation.* However, the CRR has been left unchanged at 6%.
The last hike that RBI announced was on March 17, 2011 when RBI had raised repo and reverse repo rates by 25 basis points.
RBI Governor Dr D Subbarao announced these measures as part of annual credit policy to contain inflation, which is hovering around 9%.
RBI has also reduced the GDP growth rate for the current fiscal to 8% against the government’s projection of 9 per cent. The economy grew by 8.6 per cent in 2010-11.
The reverse repo, the rate at which bank park funds with RBI, has been raised by 50 basis points to 6.25%.
“High oil and other commodity prices and the impact of the Reserve Bank’s anti-inflationary monetary stance will moderate growth,”said Dr Subbarao.
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