Wednesday, July 24, 2013

Inflation and Depreciation...


Article;
It will be illogical for RBI to cut rates.

Comment;


It is true that the RBI should be more concerned about inflation than the rupee exchange rate. We read that Indian rupee is undervalued and that its right value is Rs 76 per dollar, according to Mac Donald Currency Index. The RBI should be worried about inflation which has sent the real interest rate in negative and people’s savings are losing value because inflation is higher than the interest rate they are getting for their savings, which has reduced the rate of deposits. They are discouraged if they know… Our inflation rate is 9% and if our currency depreciates 10% once a year we should not be surprised. Our inflation rate and our depreciation rate is almost same therefore (i think) we have a correlation, and there should be... I think if the RBI concentrates on inflation it will keep the currency depreciation in check because tighter monetary policy will release less liquidity in the system…

No comments:

Post a Comment

Welfare programs signal a shift from an empowering growth-based model to a more palliative, subsidy-dependent one.....

  The rate of poverty reduction was significantly faster and arguably more inclusive in the 2004–2014 period than from 2014 to 2025, despite...