RBI raises key policy rates
The Reserve Bank of India RBI made a quarter-of-a-percent increase in key policy rates on April 20. The repurchase rate rose to 5.25% and the reverse repurchase rate to 3.75% effective immediately the cash reserve ratio rose to 6% on April 24.
The RBI attributed the rise to concerns about high inflation following India's economic recovery in the second quarter of 2009. The central bank hopes to contain inflation and sustain the recovery with the rise. RBI may have taken a bit of a risk bet by hiking rates by only 25 basis points, wrote Credit Agricole in a report. Even if headline inflation is likely to stabilise...
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