The central bank increases the interest rates in order to lower the inflation prevailing in the economy. On the other hand, the output in the industrial sector of India increased less than the estimated limit.

According to the statement provided by the Central Statistical Office, the production in the industrial units, utilities and mines increased by 4.1% in the month of August, after witnessing a gain by 3.8% in the month of July. Whereas a survey revealed in the Bloomberg News, forecasted a growth in the production by 4.7%.

Meanwhile, the markets of nation like Brazil and Indonesia have decreased interest rates on loan in order to protect their economy from the effect of downfall in the US and European economy. India is certainly not going to lower its interest rates on lean as it is still fighting with the inflation in the economy.

Also, the Indian currency witnessed a fall by 8.9% against dollar, which is said to be the highest fall of the year way to increase in the import expenditure. Though the currency increased by 0.6% for a while, also it gained 2% at the Bombay Stock Exchange Sensitive Index. The yield in the 7.8%, expected to mature by 2021 with an increase of 5 basis points.

Recently on September 16, Governor Duvvuri Subbarao increased the repurchase price by 8.25%. According to him, consistent price rise will decline by March 2012.