MW: India central bank raises lending rate 0.25 point
By V. Phani Kumar
HONG KONG (MarketWatch) -- The Reserve Bank of India on Tuesday raised its lending as well as borrowing rates by a quarter-point to cool inflationary pressures. The RBI raised its repurchase or lending rate to 6.5% in its seventh such hike since the beginning of 2010. The central bank also raised its reverse repurchase or borrowing rate by 0.25 points to 5.5%. Both decisions were in line with expectations. The RBI also extended the period for offering additional liquidity support to commercial lenders by more than two months in view of the existing cash crunch in the banking system. Banks can now access the additional liquidity support, equal to 1% of banks' net demand and time deposits, until April 8, as compared to Jan. 28, when the facility was due to expire.
