New Delhi, Jan. 24: Finance minister P. Chidambaram today said the RBI’s move to hike repo rates was a “pre-emptive action” to keep inflation in check and could be reversed once the external situation improved.

“The government and RBI are keen to keep inflation below 5 per cent and given the strong credit and consumer demand, we do not want to stoke inflationary expectations,” he said.

“The hike in repo rates is a pre-emptive action by the RBI, which wants to stay ahead of the inflation curve. It could be reversed once the situation clears,” he said.