India sits pretty after Reserve Bank action | business | Hindustan Times
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India sits pretty after Reserve Bank action

Policy-makers in the North Block and RBI acted with speed at the weekend to address the emerging challenges even managing to address a growing negative sentiment.

business Updated: Nov 02, 2008 20:39 IST
Mahua Venkatesh

The worst may be over for the country’s economy in a season of international turmoil.

Policy-makers in the North Block and RBI acted with speed at the weekend to address the emerging challenges even managing to address a growing negative sentiment.

A month ago, India was grappling with a severe liquidity crunch, which was choking the credit market, while inflation close to 12 per cent threatened consumer confidence and a depreciating rupee made imports costlier. Banks have now signalled that lending rates may soften.

“At present, India is in a comfortable situation, thanks to the steps taken by the government and the RBI,” said credit rater Crisil’s principal economist D.K. Joshi.

Saugata Bhattacharya, vice-president at Axis Bank, said the weekend action by the Reserve Bank addressed a great uncertainty concerning a shortage of liquidity that would have hit lending plans of banks.