Thursday, March 5, 2009

RBI cuts rates finally...

... but, nearly two months too late. And even this may not be enough. If this was to have been done anyway, it could as well have been done much earlier, and given the economy much needed breathing time when the downturn was building up.

The critical need of the hour, even more than the substance of stimulus measures, is the need to restore the badly shaken confidence in the markets. The clear indications of the economic downturn and the fast declining inflation should have been enough for the RBI to aggressively cut rates.

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