Tuesday, November 2, 2010

Reserve Bank of India Raises Rates 25bps

The Reserve Bank of India raised the repurchase rate 25bps to 6.25% from 6.00% and also raised the reverse repurchase rate by 25bps to 5.25% from 5.00%. The increase was driven by relatively high inflationary pressure, as well as relatively robust economic growth, however the RBI Governor Duvvuri Subbarao noted that the prospect of further rate hikes in the “immediate future is relatively low.” The RBI is likely also conscious of the prospective quantitative easing moves and currency weakening that are widely expected to be announced by the US Federal Reserve and Bank of Japan this week.



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