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Repo rate up 25 bps, reverse repo up by 50 bps
July, 27th 2010

For the fourth time in 2010, the Reserve Bank of India (RBI) has hiked the key rates in its ongoing campaign to tame inflation.

Buzz up!In its quarterly monetary policy review on Tuesday, Jul 27, the central bank hiked repo rate, the rate at which RBI lends private and public sector banks, by 25 basis points while the reverse repo rate, the rate at which the RBI borrows from banks, was increased by 50 basis points.

The Cash Reserve Ration (CRR) remains unchanged at 6 per cent.

The hike in the policy rates were expected as the inflation for Jun 2010 stands at 10.55 while the food inflation was above 12 per cent.

Earlier in a mid-cycle rate hike on Jun 3, RBI increased the repo rate by 25 basis points to 5.5 percent and the reverse repo rate by a similar quantum to 4 percent.

The apex bank's move to tighten the monetary policy had already received support from the prime minister's economic advisory council.

 
 
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