RBI hikes repo rate by 50 basis points, CRR by 25 basis points

RBI hikes repo rate by 50 basis points, CRR by 25 basis points

Reserve
Bank of India (RBI) today, 29 July 2008, raised repo rate by 50 basis
points to a seven-year high of 9% to curb inflation, now running close
to 12%, and dampen inflationary expectations. RBI also raised the cash
reserve ratio (CRR), the proportion of funds that banks must keep on
deposit with it, by 25 basis points to 9%. The central bank left its
reverse repo and bank rates unchanged.

The tone of the monetary policy was extremely hawkish.