When the economy slows down, central banks respond by reducing interest rates. This, along with fiscal stimulus, can possibly arrest the slowdown and initiate a recovery. But as the recovery gains traction, it fuels inflation, first in asset prices and then gradually in consumer prices, which compels central banks to raise interest rates again.

The RBI has kept the rates unchanged for now. But with inflation on the rise once again, it appears a

Read more: EconomicTimes

Share.

Leave A Reply