In a bid to bring down inflation, the Reserve Bank of India, in its annual monetary policy review, today raised repo and reverse repo rates by 50 basis points each for the current fiscal. The rate rise is its ninth since March 2010, and exceeds market and economists' expectations for a 25 basis point rise. While the repo rate has been raised from 6.75% to 7.25%, the reverse repo rate has been raised to 6.25%. However, the Reserve Bank has kept the Cash Reserve Ratio unchanged at 6%. Savings bank deposit interest rate was increased from 3.5% to 4%. Under a new arrangement, the repo rate becomes the central bank's only independently varying policy rate, and the reverse repo rate, at which the RBI absorbs excess liquidity, will be pegged 100 basis points below the repo rate. The central bank said high prices of oil and other commodities and the cumulative impact of its policy measures will lead to moderating growth of about 8 percent for the current fiscal year, assuming a normal summer monsoon and global crude oil prices of 110 dollars a barrel. The RBI said it expects inflation to remain elevated near March levels in the first half of the fiscal year that began in April before easing in the second half, and set a target of 6 percent headline inflation, with an upward bias, for the end of the fiscal year in March 2012. Reserve Bank of India Governor D Subbarao stated in the bank's annual monetary policy statement that current elevated rates of inflation pose significant risks to future growth and bringing them down, therefore, even at the cost of some growth in the short-run, should take precedence.