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New DelhiFeb. 1Indian Inc gave a mixed reaction to the third quarter review of the Annual Monetary Policy, announced by the apex bank on Wednesday. The Confederation of Indian Industry said that given the liquidity situation, the repo rate increase would have the desired impact and help reduce headline inflation.

FICCI, on the other hand, said that although RBI's concerns on overheating in the market is understandable, the ever-increasing lending rates will have adverse impact on small and medium enterprises, which do not have any other recourse to fund expansion plans.

Assocham too has said that the repo rate hike was uncalled for, as it would increase the cost of borrowing.

(This article was published in the Business Line print edition dated February 2, 2007)
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