Banks will now be seeing banks hold on to more cash. Every time ar b i tunes the figure upwards, it becomes more expensive for corporates and individuals to borrow money. For every percentage point increase in surplus liquidity, the average inflation could rise by about six t basis points in a year. India isn't immune to inflationary pressures. If the arbia doesn't do something about it, they'll be breaking their own mandate of containing inflation.
Last week, the Reserve Bank of India published its annual report on Currency and Finance. And while these are long, boring documents — this one has over 150 pages, we’ve speed read it for you and tried to offer a couple of interesting insights from the report.
So that’s what we will talk about today.
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