RBI hints at key policy rate hike tomorrow

Mumbai, Jan 24 (PTI) Indicating another hike in keypolicy rates in its quarterly review tomorrow, RBI today saidthat containing inflation would be the top priority as highrate of price rise could hurt the economic growth.

"... containing inflation will have to be the predominantobjective of monetary policy in the near term," the ReserveBank said in its macroeconomic review released a day beforethe third quarterly review of the policy.

The review further said that upside risks of inflationhave increased and it could endanger the growth objective andalso amplify risks to inclusive growth.

The economy grew by 8.9 per cent in the first half of thecurrent fiscal, but inflation remained at a high level of 8.43per cent in December, led by high food prices.

The food inflation for week ended January 15 was 15.52per cent after touching a high of 18.32 on December 25, 2010.

The central bank raised key short-term lending (repo)and borrowing (reverse repo) rates for six times in 2010 totame inflation.

The quarterly monetary policy, to be released tomorrow,is expected to balance the need for containing inflation andpromoting growth. .