Raghuram Rajan 's RBI sprang a surprise on the world by turning hawkish during the monetary policy review meet that was hyped up significantly in recent weeks, but ultimately the cbank continued with D Subbarao's much-maligned policies with an interest rate hike - RBI hiked short-term lending (repo) rate by 0.25 per cent to 7.5 per cent. Raghuram Rajan however, said the hike made Friday in the key policy repo rate cannot be immediately viewed as negative for economic growth. He added that the repo rate hike affects 0.5 percent of the entire borrowing of the banking system. A hawkish RBI unexpectedly raised the policy rate as it kept its focus on controlling inflation , which it felt would be above the expected levels in the current fiscal.
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