Mumbai - AFP
India\'s inflation-fighting central bank on Tuesday raised interest rates by a quarter-point, the 13th hike since March last year, while warning of a further economic slowdown this year. The Reserve Bank of India (RBI) raised its repo rate at which it lends to commercial banks by 25 basis points to 8.50 percent and hiked the reverse repo -- the rate it pays banks for deposits -- by the same level to 7.50 percent. India\'s repo rate is now at a near three-year high while the reverse repo is at its highest level in more than a decade. India has the highest inflation rate among the world\'s major economies, sparking multiple rate hikes to tame soaring consumer prices. After a policy maker meeting in the country\'s financial capital, Mumbai, RBI governor Duvvuri Subbarao suggested there would be no more rate hikes in 2011. \"Notwithstanding current rates of inflation, the likelihood of a rate action in (the) December mid-quarter review is relatively low,\" he said in a statement on the bank\'s website. \"If the inflation trajectory conforms to our projections, further rate hikes may not be warranted.\" Subbarao added that India\'s economy was likely to expand by 7.6 percent in the financial year to March 2012, lower than an earlier forecast of 8.0 percent. Inflation was expected to slow to 7.0 percent in the same period, he added. Analysts, who widely expected Tuesday\'s rate hike, said the latest increase could mark the peaking of India\'s rate cycle and predicted that the latest increase would be the last until at least the end of the calendar year. The central bank last raised rates in September.