Reserve Bank of India hikes repo rate, keeps most key interest rates stable

Tuesday, October 31, 2006

The RBI headquarters in Mumbai

The Reserve Bank of India (RBI) has hiked the repo rate by 0.25 percent to 7.25 percent, keeping the reverse repo rate unchanged at 6%.

The Bank rate and the cash reserve ratio are left unchanged at 6% and 5% respectively.

In its mid-year review of monetary and regulatory policy, the Reserve Bank has forecast an annual GDP growth of 8.0%, as against the 7.5-8.0% forecast earlier in its annual policy statement and first quarter review. The Reserve Bank indicated that inflation will be contained between 5.0-5.5%, during the year 2006-07.

The Reserve Bank estimated real GDP growth in the first quarter of 2006-07 at 8.9%, up from 8.5% last year.