RBI hikes Repo rate by 40 basis points; Sensex dives over 1,300 pts, Nifty falls below 16,700; more

Get ready for a big jump in your EMIs. Home, auto and other loan EMIs are likely to increase after the Reserve Bank of India (RBI) hiked its key interest rate by 40 bps in a surprise move on Wednesday in an effort to tame inflation.

The RBI also hiked the cash reserve ratio (CRR) by 50 basis points to 4.5 per cent, which will now require banks to park more money with the central bank and leave them with less to loan to consumers. This would drain Rs 87,000 crore of liquidity from the banking system, RBI Governor Shaktikanta Das said.

And the markets logged its worst day in over eight weeks as Sensex dived over 1,300 points while Nifty ended below 16,700 mark.