India’s economic soft patch has put Asia’s most dovish central bank on notice, yet again. Despite the central bank’s two interest-rate cuts this year, borrowing costs in the economy aren’t coming down fast enough. That’s kept a lid on investment and consumption in the economy, and adds to pressure on the central bank to take more easing action this week. “But unless the market is comfortable with respect to expectations on liquidity those cuts will not get fully transmitted." According to Deutsche Bank AG, the net deficit on rupee liquidity has averaged $8 billion in the past six months.

Source: Mint June 02, 2019 00:56 UTC