The RBI has hiked short-term lending and borrowing rates and the portion of money banks deposit with it by 25 basis points each.<br/><br/>The repo rate i.e short term lending rate has been hiked to 5.25 percent while reverse repo rate i.e short time borrowing rate has been raised 3.75 percent.<br/><br/>The Cash Reserve Ratio, CRR, or the portion of deposits banks park with RBI has been increased to 6 per cent. The move has been taken to control the inflation spiral without choking growth. However the bank rate has been retained at 6 per cent.<br/><br/>The hike in CRR, which will come into effect from Saturday, will absorb 12,500-crore rupees excess cash from the banking system. Banks have already indicated that they may not pass on the increased cost to the borrowers immediately as liquidity still remains sufficient in the system.<br/><br/>Assuring that the policy actions would not halt the recovery, the RBI pegged the financial year 2010-11 GDP growth at 8 per cent.<br/><br/>It also pegged the wholesale inflation, which is currently hovering close to the double-digits, at 5.5 per cent for financial year 2010-11.<br/><br/>Announcing the policy measure in Mumbai, the central bank said it would closely monitor the price situation in the economy and would take further action as warranted.