Divergent policies
At a time when there are debates in India on whether RBI should begin to cut rates in December, it is worth taking a look at what some other central banks are up to
At a time when there are heated debates in India on whether the Reserve Bank of India should begin to cut rates in December, it is worth taking a look at what the central banks of some other countries are up to.
Indonesia increased rates this week to keep inflation expectations in check after a decision by the new government to raise domestic fuel prices to cut its subsidy bill. Russia has raised its policy rates by 1.5 percentage points in a bid to defend its rapidly weakening currency. The new government in Brazil has backed an increase in interest rates. Even South Africa increased interest rates in July. But China is easing monetary policy as its economic growth slows.
It is interesting that India has had one of the highest levels of inflation in the world for at least the past five years. The good news is that inflation has clearly peaked. Whether it is low enough for a rate cut is quite another question.
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