In a bid to check inflation, the Reserve Bank of India today raised the repo rate and the reverse repo rate by 50 basis points, each. Announcing its annual credit policy, the Reserve Bank increased its repo rate, or its short-term lending rate to commercial banks to 7.25 per cent, and its reverse repo rate, or short-term borrowing rate from commercial banks, to 6.25 per cent. But, the RBI kept the Bank Rate and the Cash Reserve Ratio unchanged. The RBI also pegged its GDP growth outlook for the current fiscal at 8 per cent, against the government's projection of 9 per cent. The apex bank has pegged the March 2012 inflation at 6 per cent. RBI Governor D. Subbarao said bringing down inflation, even at the cost of some growth in the short-run, should take precedence. The RBI, however, gave some relief to general depositors by increasing the savings bank rate to 4 per cent, from 3.5 per cent. The apex bank also made a strong case for increasing domestic petroleum product prices, in line with global crude oil prices. The Planning Commission endorsed the RBI policy of hiking key rates by half a percentage point saying it was necessary to contain inflation. Planning Commission Deputy Chairman Montek Singh Ahluwalia termed the raising of, key and saving interest rates, as wise decisions. He expressed hope that GDP growth rate will be better than 8 per cent in the current financial year-2011-12.