.......He quickly acted on his first promise and cut short-term interest rates. The markets rejoiced. In his second policy review though, he refrained from raising repo rates. The markets were thrilled, again, because they fully expected a rate hike. Rajan’s unfortunate predecessor D. Subbarao was an inflation hawk too. But he regularly received brickbats from bankers, investors and India Inc for not reducing interest rates to ‘stimulate’ growth. Rajan has raised interest rates twice already, while being heartily applauded. Conjuring up surprises for the market once in a while is good, but it is dangerous to overdo it......
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