Cut lending rates for recovery

......We hope the Reserve Bank of India (RBI) will continue to ease to support growth on June 18. Given April 17’s 50-basis point cut, it may be too much to expect another repo rate reduction, especially as RBI had warned that the room for further easing was limited. No matter. It is just as critical that RBI Governor D Subbarao cut the cash reserve ratio to normalise money growth. After all, until liquidity improves, banks will find it difficult to cut lending rates even if the RBI cuts policy rates. Unless lending rates come down, growth will surely fall short of our modest 6.5 per cent this year, forget the RBI’s 7.3 per cent. What about inflation? We do expect it to pierce.................

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