Prime minister`s economic advisory council (PMEAC) said that the Reserve Bank has addressed the problem of affordable credit for small and medium enterprises (SMEs) by slashing the cash reserve ratio and repo rate.

``Credit was getting costlier for SMEs as large companies were managing from their internals. From the cut, their problem has been addressed``, said Suresh Tendulkar, chairman, PMEAC.

He said liquidity was getting tighter last week, prompting RBI to inject additional liquidity.

Inter-bank call money rates have jumped last week on tighter money supply. The rates closed at 17.5-18% in the weekend.

The rates cut will not fuel inflation as prices were the problem on the cost side and by the rate cut the costs are expected to come down, he added.