The Reserve Bank of India (RBI) has raised the repo
rate by 25 basis points to 7.5% in the third quarter review of its
Monetary Policy for 2006-07 in line with the market expectations.
The RBI has maintained its inflation target stating that the current
high inflation levels may be transitional. Overall the RBI continues
to remain vigilant. While the rate hike was on expected lines the
prudential measures on standard assets provisioning announced by the
RBI reaffirms its focus on the quality of assets in the
system.