Rate cuts enough for revival?
After reaching a 26-quarter low in the second quarter of FY’20, the economy is expected to pick up pace third quarter onwards.
|, ET Bureau
Dec 05, 2019, 08.00 AM IST
Most central banks from both the developed and the emerging markets have been adopting an accommodative monetary policy on account of a general slowdown globally. Some have lowered rates by as less as 10 basis points (one bps is 0.01 per cent). In India, the Reserve Bank has lowered rates by 135 basis points so far in 2019, which is among the highest. Factoring in a possibility of another rate cut on Thursday, the cumulative quantum of rate cut this year could be 160 bps. Though there has not been a perceptible impact on the real economy in terms of revival of investments, policy makers as well as economist expect that these measures to pay off in the coming quarters. After reaching a 26-quarter low in the second quarter of FY’20, the economy is expected to pick up pace third quarter onwards.
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