Cash injection

It is wrong to believe that the Reserve Bank of India’s (RBI) decision to cut its benchmark interest rates by 0.25 percentage points has been a result of succumbing to pressures from the Finance Ministry or India Inc. The reduction was inevitable even from a technical standpoint. At 8 per cent, the RBI’s ‘repo’ or overnight lending rate was more than the 7.8-7.9 per cent yields on 10-year Government bonds.

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