 "reserve bank of india, rbi")
The Reserve Bank of India (RBI) decided to keep the policy rate unchanged on Friday, extending the low-interest rate regime in the Indian economy. While this will address growth concerns to some extent, there are two other issues that need attention. First, the transmission has been weak at the longer end and second, plush liquidity is now being linked to supply disruption-led higher inflation.
At the shorter end of the yield curve, perhaps, the rate transmission has happened more than expected. The call money rate has dipped below the reverse repo rate (chart 1). This means that banks can borrow
