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The pros and cons of RBI rate cut

What is required is change of growth strategy, from foreign finance-led to exports & domestic growth

Ajit K Ghose 

Ajit K Ghose Outside the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), there is growing clamour for a cut in the interest rate. The main arguments put forward by the proponents of rate cut are that the inflation rate is now low, that investment has been on the decline and needs to be revived, and that capacity utilisation in industry remains low.  The MPC, on the other hand, argues that the core inflation and inflationary expectations are in fact still high. It also argues that a lower interest rate can neither revive investment nor increase capacity utilisation in a ...

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First Published: Mon, July 03 2017. 22:40 IST
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