Rate cut alone may not boost growth, economists tell RBI top brass

Say durable liquidity infusion needed to reinvigorate economy; bank CEOs to meet RBI officials today

Most economists who met Reserve Bank of India (RBI) top brass including Governor Sanjay Malhotra recently as a part of pre-policy consultations told the central banks officials that a rate cut may not be enough to reinvigorate the economy, which they said needed durable liquidity infusion. 

Liquidity deficit in the banking system, measured by RBI pumping money through the liquidity adjustment facility, was Rs 3.3 trillion on Thursday, latest data shows. This deficit was the highest since January 24, 2024 when it touched Rs 3.43 trillion. 

“Banks will not cut rates, the marginal cost of fund based lending rate as