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RBI chief: cannot conclude repo rate hike is negative for growth

Raghuram Rajan, newly appointed governor of Reserve Bank of India (RBI), listens to a question during a news conference at the bank's headquarters in Mumbai September 4, 2013. REUTERS/Danish Siddiqui/Files

MUMBAI (Reuters) - Reserve Bank of India Governor Raghuram Rajan said the hike made Friday in the key policy repo rate cannot be immediately viewed as negative for growth.

He added that the repo rate hike affects 0.5 percent of the entire borrowing of the banking system.

Rajan surprised markets by raising interest rates to ward off rising inflation while scaling back some emergency measures put in place to support the ailing rupee.

(Reporting by Neha Dasgupta and Mumbai Treasury Desk; Editing by Richard Borsuk)