New Delhi, Jul 29: The Reserve Bank of India has raised repo rate by 50 basis point from 8.5 per cent. This short-term rate at which the RBI lends cash to banks was last raised on last Thursday, June 24 by 50 basis points to 8.5 per cent. The move is directed at cooling inflation that is running at nearly 12 per cent on an annual basis by containing demand.
The central bank has also raised the CRR (percentage of banks' deposits which they must keep with the central bank) by 25 basis points. This will come into effect from August 30. The reverse repo rate (the short-term rate at which the central bank absorbs cash from the market) remains unchanged at 8.75 and 6 per cent. It has also held the Bank Rate (rates used to price long-term loans to firms and individuals) steady at 6.0 per cent.