RBI hike Repo Rate while CRR no change

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The Reserve Bank of India (RBI) raised its policy interest rate for the second time on Tuesday, warning that inflation is likely to remain elevated for the rest of the fiscal year, and rolled back an emergency measure put in place to support the slumping rupee.

The Reserve Bank of India (RBI) lifted its policy repo rate by 25 basis points (bps) to 7.75 per cent, in line with the expectations of most analysts in a recent media poll, despite the risks to an economy beset by sluggish growth.

With the rupee having stabilised, the RBI lowered its Marginal Standing Facility (MSF) rate a further 25 bps to 8.75 percent, which eases liquidity in the banking system and returns the gap between the repo and MSF rates to the usual 100 basis points.

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