New Delhi: Amid widespread demand for cut in interest rate in the forthcoming monetary review to boost growth, RBI said the policy rate is not the only reason for slowdown in investments and the economy.
"The Reserve Bank maintains that interest cost is only one of the several factors that have dampened growth, and the increase in policy rate by the Reserve Bank alone cannot explain the investment slow down," RBI Governor D Subbarao said at the sixth annual Statistics Day Conference here.
"I have asked our economic research department to do a detailed study on the time-series relationship between real interest rate and investment activity. We expect to put out that report in the public domain in the next couple of months," he added.
His comments come two weeks ahead of the quarterly monetary policy review which is due on July 31.
Subbarao's decision to keep interest rate unchanged at the policy review last month to contain inflation evoked criticism from industry and the government.
Source: PTI
