-
-
-
Welcome to the club! In America, if you want to save money and earn money on your money, you don’t put it in a savings account. Does India credit unions? In America, we have credit unions and banks. I prefer credit unions. They don’t charge you a fee just for breathing!
-
In any case, inflation has fallen to the lowest in years, while at the same time production is rising, something not many Indians seem to give thanks to the present government (India Reports Upbeat Inflation, Production Data).
This means the real interest rate is quite high in India (Real interest rates are still very high in India: Citi’s Pankaj Vaishlivemint.com). While world markets helped Modi in some sectors (like lower energy prices) it didn’t help in other areas (like worsening Greek crisis & poorer world economy) and the monsoon playing a spoilsport due to the el nino.
When the inflation is low, it is best to cut interest rates so that businesses could borrow better and grow the economy. Interest rate may be cut even before the next RBI policy meet: SMC Capital – The Economic Times.
Growth is induced by providing low cost finance to industry. If interest rates on loans are low, banks are compelled to reduce the rates on deposits, too, to maintain the profit margin.
Releasing too much low cost money in the system, increases inflation.
The RBI, thus, is always walking a tight rope between managing inflation and the targeted growth figures.
Investors need to look at alternative avenues of investment, but most of them, come at a certain amount of risk. The money that you cannot afford to lose, is best parked in FDs, even at a low interest rate.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- Load More
Heart Attack Causes and its Solution
November 30, 2023
