India moves to control inflation

The Indian and Chinese economies are soaring

India's central bank has sought to cool inflation by raising the proportion of funds that the country's lenders must keep in reserve rather than lend out.

Aiming to reduce the amount of rupees in circulation, the Reserve Bank of India has raised the cash reserve ratio to 7% from 6.5%.

The move comes a day after China's central bank did the same, as both seek to control rapid economic growth.

Separately, a study criticised general living standards in the two nations.

The report by the Asian Development Bank said that despite China and India's stellar economic growth, the living standards of most of their citizens were still lagging behind other countries in the Asian Pacific and South Asia regions.

It found that while China and India together account for 64% of economic output of the 23 economies surveyed, they were ranked 15th and 17th respectively according to consumer spending per capita.

The report - which did not include Japan - found that Hong Kong had the highest standard of living, followed by Taiwan and Singapore.

Interest rates

India's new cash reserve ratio (CCR), which will come into effect from 4 August, is now at its highest level since November 2001.

While the CCR rate was lifted, the Reserve Bank of India left the main interest rate unchanged at 7.75%.

The People's Bank of China is increasing its CCR to 12% from 11.5%, starting from 15 August.