MUMBAI: The Reserve Bank of India
unexpectedly raised its policy interest rate by 25 basis points on
Friday but rolled back some of the measures it had implemented to
support the battered rupee currency.
In his first monetary policy review since taking office on September 4, RBI governor Raghuram Rajan increased the repo rate by 25 basis points to 7.5 per cent.
Justifying its move, RBI observed, "Inflation is worrisome, there is no room for complacency."
The announcement had an immediate impact on the stock markets and the sensex plunged over 500 points.
However, Rajan reduced the marginal standing facility (MSF) rate, borrowing rate for banks, by .75% points to 9.5 per cent.
The RBI had lifted the MSF to 10.25 percent in mid-July to stabilise a declining rupee.
The RBI also eased the minimum daily liquidity maintenance of cash reserve ratio (CRR) to 95 per cent from 99 per cent.
Announcing the monetary policy, RBI observed that the economic growth was trailing below potential.
Highlights of RBI's mid-quarter monetary policy review:
In his first monetary policy review since taking office on September 4, RBI governor Raghuram Rajan increased the repo rate by 25 basis points to 7.5 per cent.
Justifying its move, RBI observed, "Inflation is worrisome, there is no room for complacency."
The announcement had an immediate impact on the stock markets and the sensex plunged over 500 points.
However, Rajan reduced the marginal standing facility (MSF) rate, borrowing rate for banks, by .75% points to 9.5 per cent.
The RBI had lifted the MSF to 10.25 percent in mid-July to stabilise a declining rupee.
The RBI also eased the minimum daily liquidity maintenance of cash reserve ratio (CRR) to 95 per cent from 99 per cent.
Announcing the monetary policy, RBI observed that the economic growth was trailing below potential.
Highlights of RBI's mid-quarter monetary policy review:
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