'RBI steps to moderate credit growth right'

Finance Minister P Chidambaram today backed the Reserve Bank of India (RBI) in its steps to moderate inflation and credit growth, but also stressed the need to stimulate economic growth.

"RBI is right in taking steps to moderate credit growth. RBI will take whatever steps to moderate inflation, but it will keep in mind the need to stimulate growth," he said, after inaugurating the 32nd International Organisation of Securities Commission (IOSCO).

RBI raised the cash reserve ratio on March 30 for the third time since December and increased the benchmark overnight lending rate for the sixth time in 15 months.

On the growth versus inflation debate, the finance minister said that it was a balancing act. "I'm sure RBI is aware of its responsibilities."

"If the supply side improves together with monetary and fiscal steps, inflation will moderate" Chidambaram said.