@EUROPOL Indian equity markets fell because of the rise in bond yields in US as it would it to an outflow from India. Investing in US treasuries is one of the safest bets and if such bond yields are rising then they become an even more attractive proposition. As a result, many global investors pull out money from emerging economies.
@EUROPOL Basically there are two parts to this, in US because of fed dovish stance, equities and general market sentiment there is there would be rise in economic growth, so demand of treasuries fall, leading to hike in bond yields. It additionally globally causes an outflow from emerging markets to safer bet US.
@EUROPOL yes
@necromancer the question asks about what would reduce money multiplier and what you are saying would increase it, moreover, it's not like banks can't lend under PSL, it's not a reserve.
@thelastcoyote if they lower PSL norms that doesn't mean amount loaned would go down, it simply means amount loans to those sections would go down. PSL is a qualitative tool, it doesn't affect the quantity of amount loans
@IASVk I think it's D, since its talking about money multiplier, which as an economic concept is a function of either reserve ratio or people's saving habits. So if I had to mark I would say it's D
