.jpeg)
'RBI should ease liquidity instead of cutting rates', Mishra said - focus should be on increasing the growth rate
Neelkanth Mishra: Neelkanth Mishra, a part-time member of the Prime Minister's Economic Advisory Council (EAC-PM), said, rates were cut earlier this month and if this happens further, then there will be no increase in borrowing, as well as, liquidity problems will create obstacles.
If the RBI is willing to pick up the momentum for the growth, then rather than the rate cut, the RBI has to relax the liquidity. Neelkanth Mishra, the temporary member of the Prime Minister's Economic Advisory Council (EAC-PM), said, the rates were lowered earlier this month and if this is done again, then the lending will not rise and the liquidity shortages will act like hurdles.
Mishra said at a program in Mumbai, that RBI's Monetary Policy Committee said, its objective is to ease financial conditions and support growth, so my suggestion would be to first focus on liquidity because rate cuts are not helping.
He said, if the purpose of a rate cut is to borrow more, then new loans will not be available at lower rates, because the cost of raising money remains high due to the liquidity crunch that has been going on for the last 18 months. Despite the 0.25 percent cut in the repo rate, the one-year certificate of deposit rate still remains high at 7.8 percent.
