‘Fed decision to give greater room to Raghuram Rajan to ease rates’

“Now that the inflows in the emerging markets have been assured,at least in the short-term,the RBI Governor gets a chance to fix the problem of high interest rates affecting growth,” Assocham President Rana Kapoor said.

US Fed surprises as Ben Bernanke sticks to economic stimulus,cuts growth outlook

The Reserve Bank of India (RBI) can take some liberty with easing of liquidity conditions which will surely affect the interest rate scenario,he added.

Much to Rajan’s comfort,the US Federal Reserve has decided against tapering its monetary stimulus – under which it has been buying assets worth USD 85 billion every month – giving him space to go ahead with steps to arrest declining economic growth.

“While the Fed’s latest stance gives us a breather,India should continue to go in for big reforms so that the country remains a top destination for long-term global investors through the FDI (foreign direct investment) route,” Kapoor said.