How RBI’s high interest rate policy failed at its one job: reducing loan growth

[@hyderabadrealtrends9758]

Been following your macro data and it is top quality. Keep them coming

[@ThePrintIndia]

Thank you so much for your support! - Sharad

[@amodjp]

Food inflation needs seperate efforts on part of the agricultural ministry

[@AX-sq5vm]

No we need more temple Jai sree ram

[@rajx7120]

We need farm laws to be brought back !

[@mandarp9472]

Middle men have profited the most from high food, vegetable prices. RBI can not do much by keeping interest rates high.

[@karthigeyan143]

Interest rate of loan and investment in bank difference is very high. So we are not getting enough interest payments to spend also. This is very much bad on bank part.

[@bhikariman-sigmamale]

I actually like your show very much. subscribed print just for you

[@ThePrintIndia]

Thank you very much! This is very encouraging. - Sharad

[@RohitGupta-ok7dy]

Nice analysis.

[@ThePrintIndia]

Thank you for your feedback! - Sharad

[@pulipakasrikiran9307]

If you are the RBI governor will you have the courage to plunge the rupee by decreasing its value given the high rates in the US.

[@joydeepdas32]

When i was telling about failure of RBI , others mocked me. MR DAS to be given highest award fur SELF PRESENTATION!!

[@joydeepdas32]

Preservation

[@ranjitpal9937]

Is GDP Growth & Inflation Calculated in Wholesale or Retail Outlet Price ( eg Reliance Smart Bazar to Register Local Markets )

[@PriyansuLearning]

Both, there's the cpi (consumer price index) and wpi (wholesale price index)

[@sakshambhadoria9998]

It's always a trade off between growth and inflation.

[@Star-ds4sd]

Nice One

[@Mr1123581325]

There seems to be a disconnect. When inflation is high, central banks usually try to bring that down. Stable and low inflation is good for economy, because it encourages people to spend and it also encourages people to save - as the value of their savings di not dissipate. The issue here was - how RBI reached their goal. The conclusion here that high interest rate was unsuccessful and increasing capital reserves (when banks have to set aside more money for loans) was successful is myopic and disingenuous. These options are tools at RBI’s disposal - which worked to increase the cost of loans. When prices of loans increase demand falls. So - the question we should be asking is: “Why” the high base rate of the RBI failed to curb loans to consumers? Without understanding the causal relationship - if the RBI cuts interest rates it could have unintended consequences.

[@Buddhl59]

VC money inflow funded the personal borrowing wave. Not sure why RBI will mind that generosity with some guardrails gatekeeping the intentions of that capital dumping

[@AX-sq5vm]

Inflation is high Intrest rate must be increased higher

[@rajx7120]

Food inflation can only be fixed by bringing back the farm laws. No other way. Broken supply chain and poor crop diversification need to be fixed.

[@dharan6017]

Different sectors should have different interest rates. Having uniform high interest rate only affects growth. China succeeded because of low interest rates to industries and pushed certain sectors by subsidies so they can do more research and increase job growth

[@rakadus]

Repo rates have had nothing to do with consumer lending; both quantum and rate of interest. To create a non existent correlation and then attribute the same to RBI's so called failure is plain and simple wrong.

[@nishantjadkarb4579]

I think Increasing repo rate will make loans expensive thus reducing demand Of loans taken by the consumers. Am I missing something?

[@rakadus]

@nishantjadkarb4579 Yes, at 20% + for personal loan rates, the gap of 14% with repo rate makes little difference to whether the repo is 6.50% or 8.50%.

[@mnd3607]

Its all politics, no political party survided with high inflation...

[@DavidMackoff]

I really appreciate your efforts! Could you help me with something unrelated: my OKX wallet holds some usdt (medal dial upper pave salad flame story weasel word essay finger logic). Could you explain how to transfer it to binance

[@gurbachansingh_macrofinance]

Good work. Simple, to the point, and well researched. Thanks

[@ThePrintIndia]

Thank you so much! - Sharad

[@prembuddy]

That means rate is not high enough

[@Buddhl59]

Poor choice of experts for the economics section. The personal loans spike was funded by foreign venture capitalist funds through fintech companies like Paytm, cred, navi and their third cousin. The RBI did the right thing in not lending sovereign debt and let the white man underwrite Indian household credit. That they still clamped down is to protect Indian sovereign credit worthiness globally led by the indiscreet VC led capital dumping. Together with Vir Sanghvi’s take on Savarkar/ambedkar, old bad habits maybe creeping in. I confess that I admire the cleverness in Lok Sabha exit poll coverage and everything about the Print before that and quite like DK Singh and Snehesh. If Vir Sanghvi is thought of as a successor, the most recent piece is not impressive

[@Buddhl59]

The thing with this government is that they are far more future and technology aware way than most governments any where ever and especially the media dinosaurs here. That the media is lethargic is why the public remains ignorant is one way to explain things

[@Buddhl59]

I used to pay the monthly subscription. Repayment is due and I have my doubts now

[@lalsawirema1383]

❤

[@kallachi729]

Kitchen gardens may reduce inflation. Do not laugh this off

[@prashanthb6521]

We have started roof vegetable garden just last week :) to have better quality food.

[@kallachi729]

@prashanthb6521 great.. we too have one since long

[@abhijitdeshmukh6902]

Have you analyzed the expenses and compared them with market rates of your produce ? If your input cost is more, you probably adding to the inflation? It's a good effort though from climate change prospective! Kudos to both of you!!

[@goyalsachin22]

@@abhijitdeshmukh6902 , I've. It cost nothing to produce green vegies atop your terrace and it's more fresh/Quality controlled compared to market. obviously not possible for all vegetables but some can be easily managed.

[@prashanthb6521]

@@abhijitdeshmukh6902 My concern is only quality nutrition, expense and physical effort is secondary.

[@Openmind-on4kx]

We are growing 6% and inflation is 10%• And taxes increases income tax limits stay. Overall Indians keep paying inefficient beurocracy and policy makers. What about Inflation in medical, education and all other expenses ?