Arijit Barman: Were you shocked when the rate hike came, as we were not expecting it?
Dinesh Kumar Khara: It was not a shock but a surprise. Because, it came just a few days after the policy was announced. I would say it is a very timely action taken by RBI considering the kind of inflation numbers seen and the kind of trajectory visible at that point in view of the global scenario. Perhaps, it is a decision taken at the right time. The liquidity surplus in the economy was almost as high as about 5.7 trillion, so this 40 bps is also going to suck about 87,000 crore worth of liquidity from the system. Nevertheless, I would say that I believe that the RBI will be very closely watching the inflation bit and will be calibrating the interest rates going forward.
AB: But the worry is just when we saw credit growth in the banking sector reaching double digits after a long time. 11.2% growth year on year, that’s when the news happened….
