MUMBAI, Sept 20: In his first monetary policy review after taking over as the RBI governor, Raghuram Rajan raised repo rate (the rate at which it lends to banks) by 25 basis points to anchor inflation and inflationary expectations.
The repo rate is increased to 7.5 percent from 7.25 percent with immediate effect, while the reverse repo rate stands adjusted at 6.5 per cent.
However, the Marginal Standing Facility (MSF) rates was reduced by 75 basis points to 9.5 percent. The measure was taken to tighten liquidity and arrest volatility in the foreign exchange market.
RBI also reduced the minimum daily maintenance of the Cash Reserve Ratio (CRR) from 99 percent of the requirement to 95 percent, effective from the fortnight beginning September 21, while keeping the CRR unchanged at 4 percent.
In its last policy review in July, weak rupee led the RBI to keep all key interest rates unchanged. (UNI)
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