Raghuram Rajan yesterday increased the repo rate to 8%. This was done in view of the CPI(Consumer Price Index) being @9.87%.
Also the reverse repo rate has been brought to 7%.
This means that the Home Loan rates are bound to increase.
For those who are not aware of the words, repo rate is the rate at which the RBI lends money to the banks. Reverse repo rate is the rate at which bank deposit amount with RBI.
This brought the market to slide suddenly.

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