With rate cuts not helping, here's an unconventional step that RBI can try

It’s time for the Reserve Bank of India to take unconventional policy measures as rate cuts are failing to stimulate the economy, according to the head of fixed income at IDFC Asset Management Co.

The central bank, which reviews policy on Thursday, should look to pull down long-term yields by selling short-tenor bonds and reinvesting in longer-term ones, said Suyash Choudhary, who correctly predicted the credit crunch that has been hurting banks.

“Cutting policy rates is no longer enough,” Choudhary, who oversees $10.5 billion in debt, said in an interview in Mumbai.

The concept proposed by Choudhary is similar to Operation Twist used