Lowering rates may not really lead to the push required for growth

A cut in repo sends strong signals to the market that has to, in turn, pick-up the cues

With the monetary policy committee (MPC) already indicating in the last two policies that inflation would not be the only factor that would drive the decision on interest rate changes, it is not really a surprise that the Reserve Bank of India (RBI) has gone in for a rate cut, especially after rather disappointing numbers have come out on GDP (gross domestic product) growth in Q4 and unemployment rate. The extent of rate cut was debatable – and settling for 25 basis points (bps) would be something that the market has buffered in. The important question is whether or not