Comments on: Why the RBI should cut rates again http://blogs.reuters.com/india-expertzone/2013/06/10/why-the-rbi-should-cut-rates-again/ Straight from the Specialists Sun, 06 Mar 2016 13:25:08 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Anil29 http://blogs.reuters.com/india-expertzone/2013/06/10/why-the-rbi-should-cut-rates-again/comment-page-1/#comment-859 Tue, 11 Jun 2013 15:21:45 +0000 http://blogs.reuters.com/india-expertzone/?p=3155#comment-859 Nice Presentation. But if RBI reduces the interest rate, will this not be a vicious circle? As Rupee will depreciate due to further supply, and further outflow by FII’s from Debt as their yield is decreasing continuously.

And on the other way round if there is growth then heavy import of crude would lead to further increase CAD and depreciate Rupee.

So how is the way out of this?

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By: Anil29 http://blogs.reuters.com/india-expertzone/2013/06/10/why-the-rbi-should-cut-rates-again/comment-page-1/#comment-858 Tue, 11 Jun 2013 06:40:43 +0000 http://blogs.reuters.com/india-expertzone/?p=3155#comment-858 Hello Sir, nice article…. but don’t you think sir that by decreasing interest rates, further redemption would be seen in Indian debt market by FII and that will depreciate rupee further…. and further rupee depreciation will lead to FII’s yield for the domestic debt to zero. So this is kind of vicious circle is building up….. or the other way round if RBI cuts rate by 50 bps, the growing production needs further oil or energy which would result in further rupee depreciation. Sir I want to ask one thing why everyone is just following demand side scenario or don’t you think there should be supply side improvement required?

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