July 16, 2013 / 4:03 AM / in 4 years

Financial stocks fall as RBI raises two short-term rates

A broker reacts while trading at a stock brokerage firm in Mumbai October 6, 2008. REUTERS/Arko Datta/Files

MUMBAI (Reuters) - Shares in financial firms such as IDFC Ltd fell after the Reserve Bank of India announced measures late on Monday to curb the rupee’s decline by tightening liquidity and making it costlier for banks to access funds from the central bank.

The RBI decision to raise the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 basis points to 10.25 percent is seen tightening liquidity and hurting the funding cost of lenders.

IDFC (IDFC.NS) fell 6.5 percent while Housing Development Finance Corp (HDFC.NS) lost 3.14 percent.

Reporting by Abhishek Vishnoi; Editing by Prateek Chatterjee

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