Interest rates set to rise

Interest rates are likely to start rising soon. This was indicated by the second quarter review of the monetary policy, 2009-10, unveiled by RBI governor D Subbarao . He said in the light of rising inflationary pressure, which is projected to touch 6.5% by March 2010, the monetary policy’s priority would be to contain the inflationary expectation. The RBI left policy rates like repo and reverse repo—the rates at which it lends to and accepts money from banks—and CRR—the percentage of deposits banks are supposed to keep with it—unchanged.

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