Reverse hawkish stance

With wholesale inflation falling to a three-year-low of 7.18 per cent in December, the stage is set for the Reserve Bank of India (RBI) to start cutting interest rates in its next monetary policy review on January 29. This has become unavoidable, more so when yields on the benchmark 10-year Government paper have dropped to 7.8 per cent, the lowest since August 2010 and also below RBI’s ‘repo’ or lending rate of 8 per cent.

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