FM Backs RBI Move To Hike Key Rates

Finance Minister P Chidambaram on Friday said that the government was fully supportive of Reserve Bank''s decision to increase key short term lending rates and cash reserve ratio to contain inflation.The government is fully supportive of the moves,said Chidambaram. He also said that the Reserve Bank consulted the government on both the measures announced on Friday.The Reserve Bank hiked CRR by 0.5 per cent in two phases and repo rate by 0.25 per cent. The hike in CRR would suck out Rs 15,500 crore excess liquidity from the system.