The Mumbai Sensex hit a two-year low yesterday.
With the Reserve Bank rate at 8.5 percent, is it any wonder?
When money is expensive to borrow, people buy less.
Available goods remain unsold. Farmers chuck their produce away.
The Indian economy has confidence in growth, only this little aspect
Once the interest rate is lower, rest assured, domestic demand
will resume growth, as will exports. Once something is in favour,
it becomes in favour everywhere. That is a subtle natural law.
The stock market will improve, companies will make more sales
and bigger profits, and the notes that bears Bapu's picture will
not have such little value on the FX markets.
And India will be able to import what it needs to import.