RBI’s approach measured and balanced: FM

Finance Minister P Chidambaram welcomed the ‘‘measured and balanced’’ approach of RBI to stem inflation and said the credit policy stance would not hamper growth and investment. ‘‘I am very happy with RBI’s projections and policy stance which are in line with the government’s approach,’’ the FM said.

He said investment was taking place, pointing to the more than doubling of non-food credit at Rs 92,000 crore from Rs 44,000 crore and growth in incremental credit-deposit ratio at 96 per cent of banks. ‘‘The repo rate hike is a marginal adjustment presumably because RBI thinks that there is excess liquidity that needs to

be sucked out and the government is happy with the stance,’’ he added.

However, he admitted that the repo rate hike may put pressure on the yields on government securities and push up the Centre’s cost of borrowing ‘‘marginally’’.