RBI governor sees long term real rate challenge

Reserve Bank of India governor, YV Reddy said Thursday 28 September that long term interest rates pose a challenge to the "effectiveness of the economy."

"The long-term real interest rates have changed, but not in the desired direction. What is considered a neutral rate of interest is lower in relation to earlier conditions," and "even moderate inflation poses a dilemma in a growing economy," added Reddy.

Reddy maintained the inflation forecast range of 5-5.5% and the GDP forecast of 7.5-8%, an

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