March 04, 2015

Rate Cut an Endorsement by RBI of Government's Fiscal Strategy: Interview

Economic Times featured an interview with IDFC Chairman Rajiv Lall on the Reserve Bank of India's recent rate cuts. Excerpt below:

"... it means is that the inflation targeting framework is having the desired effect. It gives clarity to a politically-endorsed inflation target... One can also interpret this rate cut as an important endorsement by the RBI of the revised fiscal consolidation strategy of the government... we will probably see positive movement in the bond markets which should be good for the bond portfolios of PSU banks in particular. This should aid banks' profit."

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