Friday, October 25, 2013

Tightening reversal unlikely to spur growth or lower rates

............RBI is focused on lowering rates by looking at the WPI, though what has hit savings is a very high CPI. As a result, the central bank has not been able to trigger a revival in investments despite rate cuts. For four years, real interest rates have remained negative for savers. Low real rates are good for growth but not when real rates are depressed due to high inflation. ..........

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