Reading the tea leaves
Apropos of your editorial “Rates versus premium” (December 3), it should not come as a surprise that despite huge pressure for a rate cut from various stakeholders, including the finance ministry, following a perceptible drop in the level of inflation and economy getting into a near-stabilisation mode, Raghuram Rajan, the RBI Governor did not do so and preferred to maintain a status quo and consolidate the gains furthermore. He has the knack of keeping the market guessing and his policy initiatives have been one of the best in the recent times with results coming on the desired lines. The point is to create a kind of climate where a sustained recovery should translate into a sustained growth with credible measures emanating from all quarters. Business sentiments are improving fast. There are signs of revival witnessed all around and yet some genuine concerns are persisting and waiting to be addressed, may be partially for now. Going forward, one can possibly see a rate cut early next year to add impetus
to growth, if the current declining inflation momentum continues.
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