Apropos of the recent column Shaping the yield curve, it is quite possible that monetary action gives space to investment to grow as it comes through additional saving and cut down in consumption. As gold import has been curbed to large extent, there must be an impact on financial saving. However, the government has already decided to close its borrowing account to keep the fiscal deficit at 4.8% and it is quite possible through curtailing the capital expenditure. Now, the only factor to watch is the impact of Fed tapering. No doubt the recent inflation figures includes the abnormal prices of onion, vegetables and tomato which were almost trebled or quadrupled. Since the winter crops are yet to come in the market, there is hope of respite from higher prices which RBI must have taken into consideration. As the private investment has been held down for a long time, it is important that RBI should have a concern for liquidity. Otherwise, the situation is not going to change so drastically on the basis of which RBI can significantly reduce the repo rate to give the benefit of interest rates to investors. Investment has been subdued for the last three years during which inflation was also pretty high. RBI is trying to see what is the other mode through which the stalemate can be broken at least to expand the capacity. The open market operations, using the term repo window are the two other sources of pumping in liquidity. Once the liquidity situation improves the yield curve would be straightened which was inverted during the last almost a year now.
RK Arya, Faridabad
This is with reference to the article Sibling rivalry (BrandWagon, FE, December 17). It appears that the author is not fully aware of the fact that the Oreo TV commercial appeared in Tamil and Hindi. While Ranbir Kapoor plays the brother in the Hindi version, Karthi (a popular Tamil actor) plays the brother in the Tamil version of the commercial. The author has wrongly mentioned that Ranbir Kapoor and Karthi act as siblings and Karthi plays the role of the sister! The role of the sister is played by a young model in both the Hindi and Tamil versions. While the storyline is written correctly, the author mistook Karthi as a sibling. We, as readers, will welcome more research.
V Mukund, Chennai