04 May 2011

RBI's aggressive stand

The Reserve Bank of India on Tuesday raised its repo and reverse repo rates by 50 basis points each in a bid to control mounting inflation, while lowering the economic growth projection to 8% for the current fiscal.

FIIs were taken aback to see a greater-than-expected hike in the interest rates as there were concerns that it may affect India's investment cycle. Jim Walker, managing director of Asianomics Limited, in an interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee, said that a hike of 50 basis points has come like a surprise.

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