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| Hike Policy Rate |
As was widely expected, the Reserve Bank of India on Friday hiked the economic Policy Repo Rate by 25 basis points to 8.25 per cent and said the rate of price rise remained "much above" its comfort zone. This is the 12th straight rate hike since March 2010, as the monetary authority continues its war on inflation. Most observers expected the increase.
The repo rate now stands at 8.25% and the reverse repo rate now stands at 7.25%. There has been no change in the Cash Reserve Ratio (CRR), which stands at 6%. The bank rate has been retained at 6%.
The Marginal Standing Facility (MSF) rate, determined with a spread of 100 bps above the repo rate, stands recalibrated at 9.25% with immediate effect.
PRANAB MUKARJEE SAYS RATE HIGH ONLY TO CHECK INFLATION:
The RBI said it had little choice but to continue its tightening stance, as despite 12 rate hikes the year-on-year wholesale price index (WPI) inflation rose from 9.2 per cent in July this year to 9.8 per cent in August.
The oil marketing companies raised the price of petrol by Rs 3.14 a litre with effective from this month.
