Saturday, May 3, 2014

How will interest rates behave after the elections? This is what history tells us

.........However, it is highly likely that the interest rates will remain steady at the elevated level for some more months. This is because for the RBI to take any rate action, the government will have to take measures to ensure fiscal discipline. If the next government manages to cut subsidies, the RBI may be able to reduce policy rates. But then how much of a 25 basis point cut is actually transmitted into the economy?..........

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