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Image via WikipediaMUMBAI - MICOM: India's central bank (Reserve Bank of India) onTuesday (3 / 5) raised lending rates by 50 basis points, larger thanexpected.
The main interest rate hikes was the ninth in the 15 months tocontrol inflation, and the central bank warned that the move couldslow growth.
Reserve Bank of India raised the repo rate - the interest ratecharged on loans to commercial banks - to 7.25 percent andincrease the reverse repo rate - the interest rate paid to banks fordeposits - to 6.25 percent.
"Reining inflation will increase the priority of growth (economic),even if it creates some short-term shocks such as lower growth,"Reserve Bank Governor Duvvuri Subbarao said after the bank's policy makers meet in Mumbai.
The meeting's central bank carried out after data showed inflationunexpectedly jumped to 8.98 percent in March from 8.31 percentthe previous month.
"We estimate that inflation remained at high levels in the first half of this year, before starting to moderate," added Subbarao throughtelevision broadcasts.
Previous central bank raised interest rates gradually, a quartercent per phase to minimize the impact on economic growth, butthis time move more aggressively. (Ant/OL-9)
source: mediaindonesia.com
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