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RBI hikes key interest rates

 

SAURABH KUMAR SHAHI | New Delhi, January 30, 2014 17:46
Tags : Reserve Bank of India | Consumer Price Index |Raghuram Rajan |
 

The Reserve Bank of India raised interest rates by 25 basis points to 8 percent in an attempt to ease inflation, indicating it will now base rate hikes on changes in the Consumer Price Index. The RBI said it foresaw high retail inflation (which RBI governor Rajan labelled a “destructive disease”) in the near future but would cease tightening its monetary policy were the CPI to cool down. Last week, the bank set a long term inflation target of 4 percent and hoped to curb inflation to below 8 percent by 2015 and 6 percent by 2016, in line with recommendations made to the bank by the Urjit Patel committee. The RBI kept the Cash Reserve Ratio unchanged at 4 percent. Indian stocks, bond and currency fell after the announcement but quickly recovered losses before the day was over.

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Issue Dated: Feb 5, 2017