The benchmark equity indices made further declines into the negative territory during the previous one hour of trade and hit new intraday low as selling intensified among rate sensitive stocks after the Reserve Bank of India (RBI) in its first monetary policy review of 2012, raised repo and reverse repo rates by 50 basis points (bps), thus breaking its calibrated approach. The repo rate now stands at 7.25%, while reverse repo rate is at 6.25%. However, the CRR has been left unchanged at 6%. The market participants were expecting the 25 bps hike. Such a move would help ease liquidity in the banking system and cool down the inflation in near week.
Rahul Kumar says
Govt./RBI is just cutting the pockets of borrowers under so called measure to control inflation by increasing the interest rate time and again.
Bhaveek Patel says
You are right Rahul, Govt/RBI must look for some other measures to control inflation, instead of raising interest rates it should look for increasing agricultural production. Reply your views about rate hike by RBI.