RBI hikes repo by 25 bps, reverse repo by 50 bps

Posted By: Samyuktha
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New Delhi, Sep 16: To rein in inflation, the Reserve Bank of India (RBI) yet again hiked its key rates at its mid-quarter review of monetary policy on Thursday, Sep 16.

RBI has hiked the repo rate, the rate at which RBI lends private and public sector banks, by 25 basis points to 6 per cent.

The reverse repo rate, the rate at which the RBI borrows from banks, has been increased by 50 basis points to 5 per cent.

However, both the Cash Reserve Ratio and Bank rate have been retained at 6 pc.

RBI said that these actions were aimed at containing inflation without hurting growth.

This the fifth time in 2010, that the central bank was forced to rise its key rates as inflation continued way above the comfort levels.

Inflation in the fast-growing Indian economy has been the main focus throughout the year and even figured in the Aug 25 Annual Report.

For the week ended Sep 4, Inflation stood at 16.22 per cent, up from 15. 43 per cent.

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