Rate hikes will help curb price rise, says Pranab
March 17th, 2011 - 7:22 pm ICT by IANS
New Delhi, March 17 (IANS) Finance Minister Pranab Mukherjee said Thursday the Reserve Bank of India’s move to hike key policy rates by 25 basis points would help curb inflationary pressure.
“This (rate hike) is good. I do have a hope that it will have a salutary impact on the inflationary pressure,” Mukherjee told reporters here after the country’s central bank raised key policy rates for the eighth time in 15 months to tame stubborn inflation.
The central bank hiked the repurchase or repo rate to 6.75 percent from 6.5 percent and reverse repo rate to 5.75 percent from 5.5 percent.
The finance minister said the 25 basis points increase in repo and reverse repo rates were in tandem with the government’s fiscal policy.
In the mid-quarter review of the monetary policy, Reserve Bank of India Governor Duvvuri Subbarao also revised upward the inflation forecast sharply to 8 percent by end-March, from 7 percent forecast in January, and a lower 5.5 percent in November. The projection on growth rate has been retained at 8.5 percent.
Revising his earlier projects, Mukherjee said inflation was likely to remain 7.5 percent by March-end. “By March-end we can say it will be around 7.5 percent.”
The finance minister had earlier said inflation would come down to 7 percent by the end of the current fiscal.
Inflation rose marginally to 8.31 percent in February from 8.23 percent in the previous month.
- Indian central bank hikes policy rates again to curb inflation - Mar 17, 2011
- Highlights of monetary policy unveiled by India's central bank - May 03, 2011
- Policy rates up again as Indian central bank acts on inflation (Roundup) - Mar 17, 2011
- Price stability needed to sustain growth: Pranab - Jun 16, 2011
- Inflation forces another rate hike by India's central bank (Second Lead) - May 03, 2011
- Inflation will come down to 7 percent by March: RBI - Oct 25, 2011
- Rate pause will help regain growth momentum: Pranab - Dec 16, 2011
- Soaring prices prompt India's central bank to hike key rates (Roundup) - Jan 25, 2011
- Inflation forces another rate hike by India's central bank (Lead) - May 03, 2011
- Inflation eases in January, remains a concern, says Mukherjee - Feb 14, 2011
- Loans set to pinch more as central bank hikes interest rates (Roundup) - Jul 26, 2011
- India's central bank acts on price rise, upbeat on growth (Intro Roundup) - Jul 27, 2010
- India's Reserve Bank hikes key rates to tame inflation (Lead) - Jan 25, 2011
- With inflation easing, India's central bank halts rate hikes (Roundup) - Dec 16, 2011
- India's central bank acts on rising prices, upbeat on growth (Roundup) - Jul 27, 2010
Tags: 15 months, bank of india, basis points, eighth time, finance minister, fiscal policy, inflation, inflationary pressure, march 17, mid quarter, monetary policy, New Delhi, pranab mukherjee, rate hike, rate hikes, repo rates, reserve bank of india, s central, tandem