Thursday, December 19, 2013

Why waste a rate hike?

.....Since weak growth momentum has restricted RBI’s degrees of freedom in using interest rates to fight inflation, it is also important to use the limited room to synchronise domestic policy action with evolving global dynamics. With possibility of tapering by the US Fed remaining high in January, a rate hike around the same time offers tactical advantage by bolstering India’s preparedness for the unwinding of liquidity stimulus. So, why waste a rate hike now?

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