RBI (Reserve Bank of India) Hikes Reverse Repo Rate by 25bps to 8% on Tuesday

28th January 2014, Reserve Bank of India surprised every one with the hike of 25 basis points in Reverse Repo Rate.

The RBI raised repo rate by 25 basis points to 8% which is earlier 7.75%. cash reserve ratio remains unchanged at 4%.

According to RBI, the rate hike is in line with the indications given earlier. “Inflation excluding food and fuel has been high. Rate hike will set economy on the dis-inflationary path,” said Rajan after the review.

“RBI Governor Raghuram Rajan has said that the biggest risk to the rupee is the Consumer price Inflation. He also said that the slowdown in economy is getting increasingly worrisome. ”