Economics
India’s RBI Ramps Up Market Rhetoric as It Boosts Liquidity
- Central bank keeps benchmark repurchase rate steady at 4%
- RBI tells bond investors to ‘share responsibility’ on yields
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India’s central bank Governor Shaktikanta Das ramped up his rhetoric to the bond market and backed those words with actions as he sought to reduce borrowing costs without cutting the benchmark interest rate.
Hamstrung by above-target inflation, the Reserve Bank of India’s Monetary Policy Committee retained its main repurchase rate at 4% on Friday, in line with economists’ forecasts. It turned to non-interest rate tools, such as bond purchases, to keep yields under control, and lowered banks’ lending rates to spur consumption.