As the RBI Governor D Subbarao sits down to finalise his second credit policy review, the economic picture in front of him is still a muddled one. On the one hand, the governor can confidently say that some of drastic interest rate cuts announced by the RBI in the last three months have worked in reducing borrowing costs for corporates. Until early December, even AAA rated corporates were borrowing at between 10-12 per cent, but in the first few weeks of January.
