RBI hikes CRR, repo rates unchanged

The Reserve Bank of India has increased mandatory cash reserve of banks held by it by 75 basis points in a bid to suck excess liquidity to combat rising inflation.

However, short-term lending and borrowing rates between RBI and banks were kept unchanged, leading to speculation that banks' commercial lending rates may not change.

The apex bank also upped its economic growth projection to 7.5 per cent from its earlier estimate of 6 per cent for the current fiscal.

According to RBI estimate, inflation is likely to touch 8.5 per cent by this fiscal-end from over 7 per cent in December.