........One possible explanation for what might have given RBI the determination to keep interest rates unchanged could be the fear of an even sharper volatility of the rupee if it did. For a central bank, which explicitly targets the stability of the exchange rate and faces a shrill clamour for selling dollars from its reserves, cutting rates could have created an equally unpleasant situation in the coming days. The same industrialists who are asking for rates cuts today would have demanded that the RBI prevent a rupee depreciation, without appreciating the link between the two..............
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