Monday, March 18, 2013

RBI credit policy: Will Mint Street and Dalal Street unite to sustain FII flows?

......The expectation is that the reduction in the fiscal deficit creates conditions for the RBI to cut interest rates and that this will revive private investment. However, as the RBI has pointed out repeatedly, high interest rates are not the principal deterrent to investment today. The real weighted average lending rate in 2011-12 of 3.8% was way below the average of 7% in the boom period 2004-08..........

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