Wednesday, 18 April 2012

RBI tunes to FM

The finance minister explicitly mentioned about the policy reversal some 30 minutes before the RBI were to announce a 50bps cut.

Unlike other wise men, I dont think RBI was wrong to cut rates by 50bps, and it certainly hasnt let its guard down on inflation; 8% of repo rate is fairly high by itself. The problem is something else.

The rate cut is likely to bring the bitter truth in front of everyone and the markets. The bitter truth being that growth wasnt really slowing down because of rates, but for inherent structural reasons. The realization may cost Nifty its prized resistance of 5180 and some more


Anonymous said...

lower one is support boy, upper one is called resistance

Anonymous said...

Alright support. You must be a genius

Anonymous said...

That I am. You know it already.