Loans to become cheaper as RBI cuts key rate to 5-yr low

The article examines the implications of Interest rate cuts by the Indian central Bank. The Interest rates have been reduced to a five-year low facilitated by declining food and fuel prices.


Topics include Interest Rate, Investment, Saving, Consumer Price Index, Inflation and Expansionary Monetary Policy. The low Interest Rate will bring about lower cost of borrowings for loans, low deposit rates in the Banks and increase in Money Supply. This is expected to increase Aggregate Demand and Increase in capacity utilization/Investment in the Indian Economy.


Evaluation will cover effects of Expansionary Monetary Policy on Consumers, Producers and Government through Unemployment, Inflation, Investment and Economic Growth in short term and long term.