Indian Finance Minister Pranab Mukherjee announced that the increase in key rates will relieve inflation, besides keeping financial growth on the right track.

The country's central banking institution (RBI), today lifted the repo rate by 25 basis points to 5.75% and reverse repo rate by 50 basis points to 4.50%.

The Reserve Bank of India has kept cash reserve ratio (CRR) unaltered at six per cent.

At present, the food inflation is looming over 12% and the overall inflation rate is higher than 10 per cent.

In the meantime, Planning Commission Deputy Chairman Montek Singh Ahluwalia announced that the increase will not have an effect on the real financial system. (With Inputs from Agencies)