RBI hikes key rates by 50 bps

In a bid to check run-away inflation, the Reserve Bank of India (RBI) on Tuesday hiked both repo rate and CRR by 50 bps each.
In a statement the RBI said that the CRR rate would be hiked by 50 bps to 8.75 per cent in two stages.
In another move the central bank also hiked the repo rate by 50 bps to 8.5 per cent, the highest level since 2002.
On Monday the RBI Governor Y V Reddy indicated that the central bank was monitoring the inflation situation and would take the necessary steps whenever appropriate.
Repo rate is the rate at which banks borrow money from the RBI, while reverse repo rate is the rate at which RBI borrows from the commercial banks