Tuesday, September 30, 2014

Inflation, rate-cuts and the RBI's credibility...


Article;
RBI in no mood to abandon fight against inflation.

Comment;
From the middle of 2015 we already are going to see fall in the inflation rate because the government is going to change the base-year for inflation from 2004 to 2012... That would probably make a case for rate cuts... Hope... the RBI uses the same data...

Article;

Comment;
Once the RBI's credibility regarding inflation is established and supply-side bottlenecks removed, inflation would remain within limits 4-6% in the long-run (next-generation)... Europe, US and Japan are good examples... People will follow the central-bank...

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"Everybody is worried about rate cuts and nobody for lower interest rates on savings, when all save and few borrow..."

Growth is sacrificed when the value of the money is sacrificed because spending goes down due to inflation, and people buy less due to high ...