(RTTNews) - The Indian rupee that strengthened to a 5-day high of 49.5350 against the US dollar at 3:50 am ET Tuesday in response to the Reserve Bank of India's interest rate hike eased thereafter. The rupee is currently trading at 49.65.
In order to tame inflation, the Reserve Bank of India decided today to raise the repo, the rate at which the RBI lends, to 8.50 percent from 8.25 percent with immediate effect. The reverse repo, the rate at which the central bank borrows from banks, was automatically adjusted to 7.50 percent from 7.25 percent.
The cash reserve ratio of scheduled banks has been retained at 6.0 percent as expected.
The central bank also deregulated the savings bank deposit interest rate with immediate effect, thus allowing banks to determine their savings bank deposit rate.
