RBI hikes CRR by 25 basis points to 8.25 per cent

The effect of rising inflation due to hike in oil prices was seen in the Reserve Bank of India's (RBI) annual Credit Policy meet. There was focus on measures to tighten liquidity. RBI hiked the Cash Reserve Ratio (CRR) by 25 basis points to 8.25 per cent, leaving the key rates such as repo and reverse repo rates unchanged at 7.75 per cent and 6 per cent respectively.

RBI aims to bring down the inflation to 5.5 per cent in 2008-09, while on the long term it expects inflation to be around 4-4.5per cent.

On April 17, 2008, RBI had announced a 50 basis points hike in CRR for banks in two phases - April 26 and May 10.

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