The Reserve Bank of India, or RBI, has moved yet again in its ongoing fight against rising inflation, reports CNBC-TV18. It has hiked the Cash Reserve Ratio, or CRR, which is the portion of deposits that banks need to keep as cash with the central bank, by a steep 50 basis points. This hike will take effect in two stages. First, a 25 basis point hike on July 5, and another 25 basis point hike on July 19. By July 19, CRR will stand at 8.75%.

It has also hiked the repo rate by 50 basis points, which will be effective immediately.The central bank said there has been a turnaround in production of durables. “Consumption demand seems to be reviving.” The rise in non-oil imports reflects domestic demand pressure, it said. “Aggregate demand pressures are strongly in evidence. The priority now is to eschew the build-up in inflation pressures.” Read More