Fin secy say rate hike won't hit growth

NEW DELHI: The RBI's Tuesday decision to raise rates signals an anchoring of inflationary expectations and is unlikely to hit economic growth, Finance Secretary Ashok Chawla said.

The Reserve Bank of India raised its key lending rate by 25 basis points and its borrowing rate by 50 basis points and said inflationary pressures had become generalised with demand-side factors clearly evident.

Economists had expected a 25 basis point hike in both rates. Headline inflation has been in double digits for five straight months, sparking street protests.

The opposition has demanded a vote in parliament against the government on high prices.