RBI Governor Subbarao to reduce interest rates by 50bps and would raise money from bank for day to day consumption
If Reserve Bank sources are to be believed, RBI Governor D Subbarao will cut repo rate by 50 basis points straight-a-way, a major surprise to markets and his wife Urmila Subbarao. According to sources, the RBI Governor is facing serious inflationary crisis at home and received an ultimatum from Urmila Subbarao to reduce the interest rate and raise funds or will face fued.
"Yesterday itself I saw fight between Sir (D Subbarao) and Madam (Urmila) over prices of onions and potatoes. Urmila Amma told Subba Appa that she was getting difficult to buy onions at his current salary level and require him to bring some loans so that day-to-day expenses would not cut short. However, Appa told her that current rate of interest is so high and unattractive to raise money. Furious Amma asked him to immediately cut interest rates not just by 25bps as per market expectations but 50bps," said driver of Subbarao who was present while both were discussing the situation of India.
Driver, Jitendra Yadav said "Madam was really concern about the health of the economy. She also asked Appa to keep his job in tact so that recessionary impacts coming from private sector jobs would not really worsen routine life."
Driver also told that Subbarao asked his wife not to interfere in his decision making and he was committed towards reduction of inflation, which was not coming down over last 3 years. However, after a long debate he finally agreed to cut the interest rate by 50 bps.
