RBI tightens monetary policy

The RBI raised rates more forcefully than expected in the face of inflation that has held stubbornly above 10 per cent for the past five months. 

Credit Policy Special

The central bank raised repo rate by 25 basis points (bps), reverse repo rate by 50 bps, while the CRR was left unchanged.

The short-term borrowing (reverse repo) rate was raised by 0.50 percentage point to 4.50 per cent, while the short-term lending (repo) rate was raised by 0.25 percentage points to 5.75 per cent.

As expected, it left the cash reserve ratio (CRR) for banks at 6.00 percent, amid ongoing tight liquidity in the banking system.

Text: Agencies

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