RBI Raises Interest Rates, Sensex Down Over 500 Points

Rajan said the timing and direction of further actions on exceptional measures will be contingent upon exchange market stability and can be two-way.
"Further actions need not be announced only on policy dates. However, any further change in the minimum daily maintenance of the CRR is not contemplated," he added.
Stock markets crash
Stock markets tanked by 2.7 per cent soon after the Reserve Bank's hawkish policy announcement in which it hiked the repo rate by 25 basis points.
The BSE sensex, which was trading weak in the morning trade, crashed over 559 points or 2.7 per cent to 20,087.44 soon after the mid-quarter policy by RBI.
The National Stock Exchange's Nifty fell 2.48 per cent or 152 points to 5,963.65.
The forex market also reacted negatively and the rupee depreciated 69 paise to 62.46 to a U.S. dollar.
The markets had soared to a three-year high on Thursday after the U.S. Federal Reserve unexpectedly left its stimulus programme unchanged, easing fears of capital outflows.
Highlights of RBI's mid-quarter monetary policy review:
Key short-term lending rate (repo rate) hiked by 25 basis points to 7.5 per cent
Borrowing rate for banks reduced under MSF to 9.5 per cent
Minimum daily liquidity maintenance of CRR eased to 95 per cent from 99 per cent
Cash reserve ratio (CRR) retained at 4 per cent
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