a) Let’s start by addressing the elephant in the room- the liquidity crisis: Interest rates were aggressively jacked up to vacuum cash from the economy. Now the situation has been somewhat stabilized. Again the central bank is offering to lock up banks extra cash reserves at a fixed 3%. Was the aggressive hike in interest rates necessary? Does the central bank not know how much in the increment of interest rates brings in what amount of deposits.
b) Dangerously high spread of interest rates. Interest rates have gone up by more than 5% within a couple of weeks. This is not normal. You don’t call the fire brigade when you have burnt the barbecue in the backyard. That’s excessive.
c) Despite the unavailibity of cash. How did we clock inflation @7%. What are the corrective measures?
d) Not much has been done to increase the confidence of investors in the financial markets. Margin lending amount has been brought down by 20% instead. Without wanting to stress the importance of financial markets isn’t there any way to stimulate the markets?