RBI rate action may hurt near-term growth, says Pranab

RBI rate action may hurt near-term growth, says Pranab

New Delhi: The Reserve Bank of India’s move to raise its lending and borrowing rates by 25 basis points each may have a small negative short-term impact on economic growth, finance minister Pranab Mukherjee said on Tuesday.

Mukherjee, however, hoped the move would help boost the growth rate in the medium to long-term.

Earlier, the Reserve Bank of India (RBI) lifted the repo rate, at which it lends to banks, to 6.25% and raised the reverse repo rate, at which it absorbs excess cash, to 5.25%, intensifying its fight against stubbornly high inflation.

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