Banking and monetary regulator Reserve Bank of India has announced yet another booster in the policy rates. This time the repo as well as reverse repo rates have been raised by as much as 25 bps.

Inflation in August stood at 9.8% as against 9.2% in July.

"As such, a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. It is, therefore, imperative to persist with the current anti-inflationary stance," the RBI said.

"The step is consistent with the RBI monetary stance for the first half of 2011-12 and overall concerns on growth sustainability in the medium term.

"I am hopeful that measures taken would get us back a more comfortable inflation situation earlier rather than later, while having scope for growth to pick up in the second half of the year," stated union finance minister, Mr Pranab Mukherjee.