On Tuesday, April 20, the short term lending rates have been hiked by Reserve Bank of India along with borrowing rates by 25 basis points each. In order to check inflation, the RBI has also hiked the portion of money banks deposit with it by 25 basis points.
RBI on Tuesday raised the repo, reverse repo rates to 5.25 and 3.75 per cent, while Cash Reserve Ratio (CRR) has been fixed at 6 per cent as expected by the banking analysts. The CRR hike will take effect from April 24 and it will lead to absorption of around 12,500 crores of excess cash in the system.
