RBI raises interest rates

New Delhi : To fight inflation, the Reserve Bank of India (RBI) on Thursday raised the benchmark short-term interest rates—repo by 25 bps to six percent and reverse repo by 50 basis points to five percent.

Repo rate is the short-term lending rate and Reverse repo rate is the short-term borrowing rate.

The cash reserve ratio, which is the level of deposits that commercial banks must keep with the RBI, remained unchanged at 6.0 percent.

“Inflation remains the dominant concern in macroeconomic management”, RBI said in a press release.

The Reserve Bank of India (RBI) raised interest rates for the fifth time this year on Thursday to tame the inflation that is running well above comfort levels in the fast-growing economy.

India’s economy grew in the March-June quarter by 8.8 per cent over a year earlier, its fastest pace in nearly three years while industrial output rose 13.8 per cent annually in July, the fastest since April.