India lifts rates, banks' cash ratio to control inflation

[MoneyGuy]

HONG KONG (MarketWatch) -- The Reserve Bank of India Tuesday raised its benchmark lending rate by a higher-than-expected 0.5 percentage points to 9% to clamp down on inflation. The central bank also raised banks' cash reserve requirement by a quarter-point to 9%. The RBI wrote in a statement the policy moves were aimed to reduce "the current intolerable level of inflation." In its most hawkish indication yet, the RBI said it intends to reduce inflation to "a level close to 7% by March 31" from 11%-12% at present.

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