“The slowdown has arrived” (Business Line, September 1) made interesting reading. Today's inflation numbers clearly indicate that the RBI should not relax its inflation watch and continue its hawkish stance. Why are real estate prices so high? If prices are reduced, will not demand pick up? Automakers have not indicated a major decline in sales. In fact, there have been increases in certain cases. Why the cry for low interest rates? The RBI has resisted pressure from interest groups to reduce interest rates. Kudos to the RBI to sticking to its dharma of inflation control! As the RBI governor rightly stated, economists should be people-oriented. Given the present difficulties in sourcing External Commercial Borrowings (ECBs), corporates should prepare for much tighter liquidity and higher interest rates.
Srinivas (HBL)
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