The country's central bank (RBI) has lifted its short term lending rate (repo) and short-term borrowing rate (reverse repo), for the eighth time since March last year, by 25 bps with the aim to curb inflation.

The repo rate has been raised to 6.75% from 6.50%, whereas the reverse repo has been lifted up from 5.50% to 5.75%.

Rate increases is likely to make loans, comprising housing loan, auto loan and business loan, costlier.

Keeping in view the liquidity situation, the RBI has kept the CCR unaltered at 6%.

The central bank lifted up inflation projection from 7% to 8% for March-end.

During its mid-quarterly appraisal, the central bank said, "After a slight moderation in January, headline WPI inflation reversed in February 2011 accompanied by a sharp increase in non-food manufactured products inflation."

The overall inflation surge marginally during the last month to 8.31% as against 8.23% during February 2009.

"Based on the current and evolving growth and inflation scenario, the Reserve Bank is likely to persist with the current anti-inflationary stance," the bank added.