Opinion | At the heart of India’s monetary policy transmission problem4 min read . Updated: 06 Jun 2019, 03:41 PM IST
The premium government bonds enjoy over the repo rate must come down for lending rates to fall
Going into the monetary policy announcement of 6 June, with the growth slowdown confirmed, and the tame inflation readings, it did not seem to be an issue so much of whether, but by how much, the repo rate was going to be reduced. The 25 basis points reduction which actually happened was at the soft end of the very wide range of expected cuts.
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