Reserve Bank of India Governor Raghuram Rajan surprised markets in his maiden policy review on Friday by raising interest rates to ward off rising inflation, while scaling back some emergency measures recently taken to support the ailing rupee.
Reserve Bank of India Governor Raghuram Rajan surprised markets in his maiden policy review on Friday by raising interest rates to ward off rising inflation, while scaling back some emergency measures recently taken to support the ailing rupee.
Mr Rajan, who took office early this month amid India's worst economic crisis since 1991, increased the repo rate by 25 basis points (bps), or 0.25 per cent, to 7.50 per cent, defying most forecasts that he would leave it on hold to bolster a sluggish economy.
The apex bank reduced the marginal standing facility (MSF) rate to 9.50 per cent, which makes it cheaper for banks to borrow. Since the middle of July, the MSF has been widely been viewed as India's effective policy rate.
Here is a timeline of changes to the key rates in India since as early as 1949:
Reverse repo rate since February 2001
Note: Prior to October 29, 2004, the reverse repo rate was known as the repo rate.
Cash reserve ratio since 1992
Statutory liquidity ratio (SLR) since 1949
Copyright @ Thomson Reuters 2013
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