The Finance Minister, Mr Pranab Mukherjee, today said the RBI’s decision to raise key policy rates would help in moderating prices and felt that inflation might go up marginally against the earlier projected levels by March-end.

“We can say (inflation for March-end) may be 7.5 per cent,” he told reporters in his reaction to the central bank raising its own fiscal-end inflation forecast to 8 per cent from 7 per cent previously.

The Reserve Bank of India, in its bid to rein in inflation, also raised the short-term lending and borrowing rates by 25 basis points in its monetary policy review meeting today.

This is for the eighth time that the apex bank has raised the key rates since March 2010.

On the RBI’s rate hike, Mr Pranab Mukherjee said: “It is good. It will have its impact on the inflationary pressure.”

He further said that repo and reverse repo rates have been increased by 25 points each, which is in tandem with the fiscal policy and thinking of the government.

Mr Pranab Mukherjee added that the difference between repo and reverse repo rates have been maintained at one per cent, adding that, “I do hope it will have a salutory impact on inflationary pressure.”

The short term lending rate (repo) has been increased from 6.5 per cent to 6.75 per cent, while the short-term borrowing rate (reverse repo) has been raised to 5.75 per cent from 5.5 per cent.

The overall inflation increased marginally in February to 8.31 per cent from 8.23 per cent a month ago.

The Commerce and Industry Minister, Mr Anand Sharma, said” “I hope that credit will continue to made available freely, liberally and on good terms to the industry, because investments must go in for capacity building and for additional capacity creation, which the industry is committed to do.”

The Minister was speaking to reporters on the sidelines of a CII meet.

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