The Reserve Bank  deputy governor K C Chakrabarty on Sunday said that managing prices is the bank's main priority, and Friday’s decision to raise key short-term lending rates was aimed at containing inflation, at an event organised by Assocham.

The RBI on Friday evening, weeks before its scheduled policy review on July 27, had raised the short-term lending and borrowing (repo and reverse-repo) rates by 25 basis points to 5.5 per cent and 4 per cent, respectively, to check rising inflation.

“For RBI inflation is the target... for the finance ministry, it is growth. But in the long run, both will converge... inflation is the biggest enemy,” RBI Chakrabarty told reporters on the sidelines of an Assocham function here. “Monetary policy authority and the ministry can take different views. Even if we take anti-inflationary measures, it does not mean that we are against growth. Immediately, growth might suffer, but in the long-term, there will be inclusive growth,” he added.

Wholesale prices-based inflation crossed double digits (10.16 per cent provisionally) in May, but as per final figures, the rate of price rise has been 11 per cent or more since February. Food inflation eased to 12.92 per cent in the third week of June from above 16 per cent. Economists are of the opinion that the RBI might announce more monetary tightening measures at its scheduled policy review to control the situation. Chakrabarty said this decision is still under debate.

Chakrabarty said the RBI would come out with a paper on the new banking licence policy by end July. Finance minister Pranab Mukherjee, in his budget speech in February, had said that the RBI would grant banking licenses to private sector entities and non-banking finance companies (NBFCs).