Mumbai, May 3 (IANS) India’s central bank hiked its short-term lending rates by 50 basis points to tame inflation and said the borrowing rate will henceforth remain 100 basis points below it in a major policy decision taken Tuesday.
Repurchase rate, or the short-term lending rate, now stands at 7.25 percent against 6.75 percent earlier, while the reverse repurchase rate, or the short-term borrowing rate, now automatically stands revised to 6.25 percent, against 5.75 percent.
Reserve Bank of India Governor D. Subbarao, who unveiled the monetary policy before the chief executives of commercial banks at the headquarter’s at Mint Street in mid-town Mumbai, said these policy decisions take immediate effect.
Other policy rates such as the statutory liquidity ratio and the cash reserve ration — the minimum quantum of money against deposits which the banks have to retain as cash or specified government securities — have been left untouched.
The bank rate also remains unchanged at 6 percent.
