Home, auto loans to go dearer
RBI raises key policy rates
PRESS TRUST OF INDIA
Mumbai, Mar 17: Borrowers will have to pay more for their home and auto loans as the Reserve Bank today announced an increase of 25 basis points in key policy rates-- 8th hike in one year--in a bid to contain spiraling prices of essential commodities.
Bankers said they will take a call on rates next month but ruled out an immediate hike in interest rates.
The Reserve Bank of India (RBI) in its mid-quarterly policy review raised repo (short-term lending) and reverse repo (borrowing) rates to 6.75 and 5.75 per cent respectively.
RBI injects liquidity through repo rate, while it absorbs funds through reverse repo window.
Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia welcomed the decision, but India Inc expressed fears that the move would hurt growth.
The RBI move apparently dampened the investor sentiment. Reacting to hike in policy rates, the Bombay Stock Exchange benchmark Sensex nosedived by close to 210 points to close at 18,149.87 points.
Lastupdate on : Thu, 17 Mar 2011 21:30:00 Makkah time
Lastupdate on : Thu, 17 Mar 2011 18:30:00 GMT
Lastupdate on : Fri, 18 Mar 2011 00:00:00 IST
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