In a bid to tame inflation penetrating deep in the economy, the Reserve Bank of India (RBI) on Friday hiked the repo rate by 50 basis points.
This is the fourth time in a row that the RBI has raised interest rate taking it to a cumulative 5.9 per cent to calm rising inflation.
The move will also help arrest the fall of rupee against the US dollar by boosting foreign capital inflows. It will however make all types of loans -- housing, vehicles and other personal loans -- costlier. The consumer price inflation which the central bank tracks for monetary policy decisions has climbed to 7 per cent in August. This one percentage point hight than its upper tolerance limit of 6 per cent.
More to follow...
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