RBI in its quarterly review of the policy increased the short-term lending rate (repo) by 0.25 per cent to 5.75 per cent and short-term borrowing rate (reverse repo) by 0.50 per cent to 4.50 per cent though it kept cash reserve ratio (CRR), the portion of funds that banks keep with central bank, and bank (long-term) rate unchanged.
RBI had earlier on July 2 hiked repo and reverse repo rates by 25 basis points and today's hike was the fifth since January to combat inflation which is in double digits for the fifth month now.
This is the fourth policy rate hike by the Reserve Bank so far this year 2010 upto July.
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