adminto combat near double-digit inflation.
The Reserve Bank of India raised its repo rate at which it lends to commercial banks to 8,0 percent and increased the reverse repo – the rate it pays to banks for deposits – to 7,0 percent.
The repo rate is now at a near three-year high and the reverse repo is at its highest level in more than a decade, analysts say.
Overall, India has the highest inflation rate of any large Asian economy.
After a quarterly meeting of policy makers in the financial capital Mumbai, RBI Governor Duvvuri Subbarao blamed the move on a range of factors, including higher fuel prices and the rising cost of non-food goods.
“Although the impact of past monetary policy actions is still getting transmitted, considering the overall growth and inflation scenario, there is a need to persevere with the anti-inflationary stance,” he said.
The benchmark 30-share index on the Bombay Stock Exchange was 0,85 percent or 159,95 points down at 18 711,34 following the announcement. – AFP.
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