'No signal to raise interest rates’

The Finance Minister, Mr P Chidambaram, has said that the Reserve Bank of India’s move to raise the requirement for banks to keep cash with the central bank was intended to mop up excess liquidity from the system. He also felt that this step cannot be construed as a signal on interest rates, implying that banks should not look at a hike in lending rates on account of the CRR hike. I hope banks will draw the correct message from the policy,” Mr Chidambaram said. He said that he expected the country’s gross domestic product (GDP) growth to be “slightly higher” than the level projected by the central bank.