‘This rate cut will also be discounted due to inflation’

.....The significant point is, we will not be able to sustain consumerism because interest rates will stay elevated. The focus of the RBI should remain inflation. Can anyone tell me now that the rate has been cut by 25bps, will India grow its balance sheet (GDP)? There is no linkage between interest rate and growth rate in the short term. Had the RBI cut the rate six months down the line instead of now, the impact on the yield curve would have been substantially bet en you would be convinced a sustained rate cut cycle is upon us. Not now. After the repo rate was cut by 50 bps last April, inflation went up and in the end, that rate cut got completely discounted........

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