Fight inflation in all ways...

Article;
Rich nations must think about EMs while framing policy.

Comment;

I think INDIA’s problem is inflation and not unemployment as in the US. Much of the money that Fed printed took the route of developing countries like INDIA… INDIA soon was among the best investment destination which means a lot of investment fled to its shores… The money we are seeing in the Indian stock market is the result of too much foreign-investment… domestic investors are keeping their hands-off investment because they think prices will go down and that would be appropriate for buying… The monetary easing in much developed world is responsible for high inflation in countries like INDIA… Economists warned the emerging world of the hot money, back in 2011, flowing out of the developed world’s central bank and pressed for credit control because that might result in bubble… But we ignored them because CAD was a concern… But now we are in different position we have reduced the CAD to around 2%, now sustainable... We are in a better position as far as foreign currency reserves are concerned and we too have a good reserve of gold… The need to run after foreign currency has gone down and this time we need to think of lower prices when the money flowing out of QE is going down… I think Rajan should concentrate on the inflation front… a lot money went into construction through foreign investment and has probably created a bubble there… Outflow of some foreign money is good from the point of inflation because demand will go down… I think Rajan should fight inflation in all ways…