RBI may raise rates tomorrow

RBI is expected to raise its key lending rate by 25 or 50 basis at its policy review to cool inflation from near 12 per cent, and further rises are also expected, a poll showed.Seven out of 11 analysts polled expected the Reserve Bank of India (RBI) to raise the repo rate from 8.50 per cent on July 29.

In June, the central bank raised the repo rate by 75 basis points in two steps and announced a 50 basis point increase in the cash reserve ratio (CRR) to 8.75 per cent. None of the analysts expected any change to the reverse repo rate, at which the central bank absorbs excess funds from the money market. It stands at 6.0 per cent, unchanged since July 2006.

Red more in The Economic Times article.