A cut in interest rates will not necessarily increase liquidity and growth, former RBI governor Y V Reddy said today amid rising tension between the central bank and the government after the former left key policy rate unchanged.
Yesterday, Reserve Bank Governor Urjit Patel-led Monetary Policy Committee (MPC), in a slightly less hawkish policy statement, had said it was not cutting interest rates as it wanted to be more sure that inflation will stay subdued.
“We can’t simply say growth has to pick up, private investment has to pick up, therefore reduce the interest rate. That’s my limited point… I will still give benefit of doubt (to the MPC). The MPC in its wisdom would have considered all options. I can’t find fault with the MPC decision,” Reddy said on the sidelines of an event here.
via Lower interest rate won’t necessarily boost growth: Reddy | Business Standard News
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