Dampener ahead of Diwali, RBI hikes rates again

Written by: Samyuktha
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New Delhi, Nov 2: In a huge mood-dampener in the festive season ahead of Diwali, the Reserve Bank of India (RBI) on Tuesday, Nov 2 hiked the repo and reverse repo rates by 25 basis points.

The repo rate, the rate at which RBI lends private and public sector banks, has been hited to 6.25 per cent while the reverse repo rate, the rate at which the RBI borrows from banks, now stands at 5.25 per cent.

Cash credit ratio, however, remains unchanged at 6 per cent

The hike that came in the Central Bank's mid-year review of its credit policy accounts for the sixth increment of the year owing to intractable Inflation numbers.

The RBI had given the signs of the hike on Monday, Nov 1 when it raised concern over the fact that the inflation was still way above its comfort level.

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