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The Finance Minister, Mr Pranab Mukherjee, on Thursday welcomed the Reserve Bank of India's (RBI) move to hike its key policy rates by 25 basis points, stating that it was in conformity with the fiscal policy being pursued by the Government.
The RBI's decision to hike repo and reverse repo rate by 25 basis points each and maintaining the gap between them at 1 per cent would moderate inflation, Mr Mukherjee told reporters here soon after the RBI's mid-quarter policy announcement.
The Finance Minister said the RBI's move on key policy rates was in “conformity with the thinking of the Government”. The central bank had for the eighth time since March 2010 raised its key policy rates.
On inflation, Mr Mukherjee noted that the monthly or weekly fluctuations of wholesale price index (WPI) do not lead to anywhere, but highlighted that the declining trend being noticed for several weeks had continued in the last week's figure of February 26.
The Finance Minister expects WPI-based inflation to be about 7.5 per cent in March-end. The RBI on Thursday raised its own March-end annual inflation forecast to 8 per cent from 7 per cent earlier.
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