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RBI hikes short-term lending, borrowing rates by 25 basis points to fight inflation

June 16, 2011 - New Delhi

Continuing its stance to keep a check on price rise, the Reserve Bank of India (RBI) today raised key short-term lending and borrowing rates by 25 basis points for the tenth time since March 2010.

The short-term lending or repo rate has been raised to 7.5 percent, and the borrowing rate has been hiked to 6.5 percent.

The central bank has kept other rates and ratios unchanged.

It is speculated that this move of the RBI could make auto and home loans expensive.

"The policy initiative is expected to contain inflation and anchor inflationary expectations by reining in demand side pressures. The measures, would also help in mitigating the impact of potentially adverse global developments," said the RBI, and added that it would continue with its anti-inflationary stance to keep a check on price rise.


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