The rate cut by the Reserve Bank of India (RBI) seems to have lost its sting. The successive cuts in repo rate by the RBI have led to limited decline in the benchmark interest rate in the economy.
In the past 12 months, the RBI has cut is policy rate by 200 basis points (bps), from 6 per cent in June 2019 to 4 per cent.
However this has translated into 100-bps decline in yield on a 10-year government bond. The yield on a 10-year treasury is hovering around 6 per cent, against 7 per cent a year ago.
This is in line with the trend in the past five years, when the RBI pol.....