Status quo, but not good news
At least this time round, RBI has done the unexpected. There was virtual unanimity RBI would cut policy rates (read repo). The market factored in a cut by 25 basis points, if not by 50. There can be...
View ArticleDo you believe the fiscal consolidation plan?
"If government has to walk alone to face the challenge of growth, well we will walk alone." That was the Finance Minister, upset that RBI hasn’t cut policy rates. Reportedly, Deputy Chairman of...
View ArticleRBI does the expected
RBI hasn’t done anything unexpected. Policy rates are unchanged. If at all, there was some expectation about CRR being cut by 50 basis points or thereabouts, and that hasn’t happened. First, real...
View ArticleNot at this Rate…
If the markets expected the Reserve Bank of India (RBI) to cut policy rates, then the markets were irrational. There are two reasons why May’s wholesale price index (WPI)-based inflation of 4.87 per...
View ArticleDifficult to understand Raghuram Rajan's first monetary policy
Let’s get the unimportant stuff out of the way first. Those are reduction in the marginal lending facility (for emergency needs) by 0.75% to 9.5% and slashing daily CRR requirement to 95%, down from...
View ArticleScratch your head about interest rates
You can’t be blamed for being completely confused about what government is up to. On 20th September, RBI increased repo rate by 0.25%. Given inflation, no one expected RBI to reduce rates. But it...
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