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Rate Cuts Not a Magic Bullet for Investment: Raghuram Rajan
The Business Guardian
|July 22, 2025
Former RBI Governor Raghuram Rajan has said repo rate cuts by the Reserve Bank in recent times are not a "magic bullet" that will necessarily propel investments, as several other factors play a part in boosting the economy.
Rajan further said interest rates, at this point, are not overly high and the impact of rate cuts announced by the RBI will take time to play out.
"And as you correctly point out, (high) interest rates were an argument (earlier), but I do not think that can any longer be an argument.
"I do not think that necessarily this (rate cuts by RBI) will be a magic bullet to propel investments," Rajan told PTI Videos.
On June 6, RBI Governor Sanjay Malhotra-headed six-member monetary policy committee reduced the benchmark short-term lending rate by 50 basis points, taking the total reduction to 100 bps in quick succession, besides a change in the policy stance to neutral from accommodative and liquidity infusion measures.
This story is from the July 22, 2025 edition of The Business Guardian.
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