RBI’s rate cut is a surprise, given its recent signals, but whether it’ll spur investment is the question
In June, when the stance was moved to neutral, the central bank indicated that there were limits to which rate cuts can push up growth. The signal was that there were fewer chances of future rate cuts. Clearly, that view has changed, as a gap between actual and potential growth has been spied ahead that makes a case for monetary policy support. Hence, this rate cut.
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