, On Tuesday 26 July 2011, 11:07 AM
The Reserve Bank of India has continued its hawkish stance and increased both the repo and the reverse repo rate by 50 basis points each. The repo rate will now be 8 percent while the reverse repo rate will be increased to 7 per cent.
This has taken the market by surprise as most analysts expected the central bank to be more dovish and only announce a 25 basis point repo rate hike given the fall in India's industry growth.
The central bank, however, will henceforth take further action after looking at the inflation trajectory.
A shocked market saw a major set back, with the Nifty sliding 60 points and the Sensex losing 180 points.
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