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Interest Rates Determinants in Demonetised Economy


Affiliations
1 GFGC, KR Puram, India
2 GFGC, Deveanahalli, India
 

The main focus of this research study is to look into the determinants of interest rates in India post demonetisation. India entered the demonetised phase in November of 2016, and since then the economy has slugged down a lot. This study aims at studying the three explanatory variables; inflation rate, money supply and monetary policy rate in order to evaluate their impact on the trend of interest rate. It is a general belief that the variables have a relationship, in so much that they affect the interest rates. The RBI takes measures so as to create an investment-friendly rate of interest, which is necessary for promoting economic growth. This should be addressed as infrastructural expenditure incurred by banks are passed to borrowers through interest rate.

Keywords

Interest Rate, Demonetisation, Monetary Policy Rate and Economic Growth.
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  • Interest Rates Determinants in Demonetised Economy

Abstract Views: 417  |  PDF Views: 284

Authors

Aswatha Narayana
GFGC, KR Puram, India
T. V. Rajini
GFGC, Deveanahalli, India

Abstract


The main focus of this research study is to look into the determinants of interest rates in India post demonetisation. India entered the demonetised phase in November of 2016, and since then the economy has slugged down a lot. This study aims at studying the three explanatory variables; inflation rate, money supply and monetary policy rate in order to evaluate their impact on the trend of interest rate. It is a general belief that the variables have a relationship, in so much that they affect the interest rates. The RBI takes measures so as to create an investment-friendly rate of interest, which is necessary for promoting economic growth. This should be addressed as infrastructural expenditure incurred by banks are passed to borrowers through interest rate.

Keywords


Interest Rate, Demonetisation, Monetary Policy Rate and Economic Growth.

References





DOI: https://doi.org/10.23874/amber%2F2017%2Fv8%2Fi2%2F166120