Lending rate cut a national priority

We expect the Reserve Bank of India (RBI) to continue to switch to reviving growth on January 29 after exclusively fighting inflation since 2010. After all, India is that rare economy in today’s world in which lending rates are ruling at their 2008 cyclical peak. While growth has bottomed, it is unlikely to bottom out until lending rates soften by another 75 to 100 basis points (bps). In our view, lending rate cuts should be a national priority............

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