Updated Wednesday, June 25, 2008 0:00 am TWN, AFP

India’s central bank raises fresh new key interest rate

MUMBAI -- India’s central bank unleashed a fresh round of monetary tightening Tuesday, raising a key short-term borrowing rate by half-a-percentage point after inflation hit a 13 year high of over 11 percent. The Reserve Bank of India raised its repo rate at which commercial banks borrow funds from the central bank to 8.5 percent from 8.0 percent effective immediately.

In also announced a two-stage hike of the Cash Reserve Ratio, or the amount of cash banks must hold in reserve, by 25 basis points to 8.50 percent effective July 5, and by another 25 basis points to 8.75 percent on July 19.

 

 

 

 

 

 

 

 

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