The move comes after Reserve Bank of India (RBI) kept the key policy rates unchanged in its last monetary policy review and vowed to keep the liquidity tight until rupee stabilizes. However, as if not in favour of the easing monetary policy, the Indian currency continued the free fall and touched fresh record high of around 62/USD on Tuesday.
In order to stabilize the rupee, RBI has taken a lot of measures in the past month including the hike in MSF rate and the capping of the funds that banks could obtain from RBI through repo window. RBI also raised the daily CRR requirement to 99 per cent from 70 per cent, leaving the banks with no option but to hike interest rates.
Recently, Yes Bank too hiked its base rate by 25 bps to 10.75 per cent as the cost of funds continued to rise for banks.
At 10:00 hours, shares of HDFC Bank were trading at Rs 613.80 a piece, up 1 per cent from previous close on BSE.
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