
With the WPI-based inflation almost halving to its nine-month low from the 2008 peak of 12.91 per cent four months ago, the Reserve Bank of India will have the necessary cushion to signal yet another cut in its key policy rates as part of the second stimulus package to be announced by the government in the next few days.
In a marked shift in strategy from containing inflation to stimulating growth in the wake of the slowdown caused by the global financial crisis, the Mid-Year Review 2008-09 tabled in Parliament earlier this week said: “…there is considerable scope for monetary policy easing over the next 6 to 12 months to offset the global increase in demand for money that is being transmitted to India.”
Courtesy: hindu.com