Publication

This brief investigates the reasons of the Reserve Bank of India (RBI) to leave interest rates untouched despite different expectations. It discusses the implications of a significant inflow of capital and an apparent slowdown in the credit supply as reasons for the RBI's decision, as well as related issues such as the commercial banks' credit policy, inflation and the state of the international capital markets. The author argues that not changing the interest rates was the best thing the BRI could have done.