"I endorse the decision of RBI hiking repo rate as it is primarily aimed to moderate the credit growth in the country," Chidambaram said.
The hike in repo rate by 25 basis points to 7.25 per cent would also push banks to improve credit quality, he said, but added that interest rates would remain stable.
Chidambaram, who was in Ludhiana to attend the convocation of Punjab Agricultural University, said he would meet top banking officials on November 6 to take stock of the situation.
On price rise, Chidambaram said RBI had been taking steps to curb the inflationary pressures on the economy.
Elated over the Bombay Stock Exchange's benchmark index reaching the 13,000 mark on Monday, Chidambaram said the new high attained by the Sensex was good for investors.
Monetary and Credit Policy 2006-07: Complete Coverage
