RBI lowers CRR, keeps rates unchanged on inflation fears

Bankers by and large ruled out any immediate cut in interest rates while Chidambaram appeared not-too enthusisastic over the central bank's approach saying growth is as much a challenge as inflation and government would "walk alone" for tackling it.

"Managing inflation and inflationary expectations remains the primary focus of the monetary policy," RBI Governor D Subbarao said while unveiling the second quarter policy review.

He said that persistently high inflation remains a "key challenge" and growth has slid.

A visibly disappointed Chidambaram reacted to RBI's announcement saying, "Growth is as much a challenge as inflation. If government has to walk alone to face the challenge of growth, then we will walk alone."

"Sometimes it is best to speak. Sometimes it is best to be silent. This is the time for silence," he said.

Only yesterday in anticipation of a possible rate cut, Chidambaram unveiled a five-year fiscal consolidation road map and had hoped that "everybody acknowledges the steps which we are taking". (More)