RBI’s Mundra: pinning down credit-GDP link is tricky
Link may strengthen as economy stabilises
The relationship between credit growth and output growth is not straightforward, but may become stronger in future, Reserve Bank of India governor SS Mundra said on September 28.
Mundra said he had been seeking an answer to the question of whether it is possible to pin down a relationship between the variables for some time. More diverse sources of funding may have weakened the link, he suggested in remarks to a conference in Mumbai.
"A more stable multiplier of real GDP and bank credit may
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