New Delhi: Finance Minister P Chidambaram on Thursday said there were no signs of overheating in the economy, while justifying the Reserve Bank's decision to hike repo rate by 0.25 per cent as "well-intended."
"I don't believe there is overheating. RBI has only cautioned. And if they had not taken action, I think some sectors may have shown some signs of overheating." he told reporters here.
RBI Governor Y V Reddy, after releasing the busy season credit policy on October 31, had said that the hike was a clear signal to banks that borrowing from the central bank could be an expensive affair.
"Raising the repo rate is only a signal that getting liquidity from the RBI will be expensive," he had said and added that "In particular, we have asked for greater fairness and transparency in regard to housing sector because we have received complaints about somewhat less than transparent practices."
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