According to the RBI article, findings on monetary policy transmission in India suggest that monetary policy changes affect short term interest rates more than long-term rates. RBI in this article examines the impact of the monetary policy tightening that was undertaken since May 2022 in India. While anticipated policy changes do not have any instantaneous impact on long-term rates, policy surprises significantly impact all market segments and across tenors. Policy signals tend to wane, however, beyond the three-year tenure, the paper noted.
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