Interest rate hike won’t curb inflation, says BJP

July 27th, 2011 - 7:57 pm ICT by IANS  

Bharatiya Janata Party New Delhi, July 27 (IANS) Contending that the interest rate hike by the Reserve Bank of India will not help curb inflation, the Bharatiya Janata Party said the government was ignoring the supply deficit which was causing the problem.

“It seems that the government has lost the vision of the issue of inflation and it is harping only on monetary policy instead of tackling the supply constraints,” party spokesperson Prakash Javadekar said Wednesday.

“Repo rate hike will now prove counter-productive. Instead of taming the inflation, these hikes will play trigger for further inflation,” Javadekar claimed.

The RBI hiked its repo-rates by 50 basis points. This is the 11th hike in interest rates in the last 15 months, which has taken the rates from 5 percent to 8 percent now.

“This will immediately increase the finance cost of all loans and EMIs, which has become the way of life of the middle class,” Javadekar said.

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