Home loans set to rise as RBI hikes repo rate by 0.25%

For the 10th time since March 2010, the Reserve Bank of India raised the repo rate at which it lends to banks by 25 basis points to 7.5%, in line with expectations even as growth slows in Asia's third-largest economy.

The Reserve Bank of India raised interest rates on Thursday for the 10th time since March 2010, keeping up its fight against inflation even as growth slows in Asia's third-largest economy.

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The Reserve Bank of India raised the repo rate at which it lends to banks by 25 basis points to 7.5%, in line with expectations.

Latest rate increase follows on the heels of recent monetary policy tightening in China and Brazil, other big emerging economies that are battling high prices even as growth slows from last year's heady levels.

Last month, the RBI made the repo rate its sole independently moving policy rate and pegged the reverse repo rate , at which it absorbs excess liquidity, 100 basis points below the repo rate, which means the reverse repo rate was raised on Thursday by 25 basis points to 6.5%.