A gloomy year ahead

The Reserve Bank of India has its work cut out when it meets on December 16 to review its monetary policy. With October growth figures even worse than September’s, the central bank will have to take a call on easing interest rates, or at least making more credit available by tweaking the cash-reserve-ratio which will release funds to industry. The RBI has held back on the first option for long, and has in fact hiked interest rates as many as 13 times since March 2010. The bank fears that a drop in interest rates could further fuel inflation which continues to hover at nine per cent. 

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