India Tightens Monetary Policy

In its first step toward tightening monetary policy, The Reserve Bank of India held interest rates steady and required banks to set aside more bonds as reserves, reports The Wall Street Journal.

 

According to the newspaper, the central bank's move to increase the statutory-liquidity ratio won't affect the banking system's liquidity -- which analysts say if left too loose could threaten to magnify inflationary pressures and undercut India's early recovery -- but it sends a strong signal that a reversal of its loose stance has started.

 

The Journal adds that India's economy has been one of the most resilient in a region that has led the global recovery, and signs that inflation will pick up in the months ahead appear to be a growing concern for the RBI. It lifted its inflation-rate estimate for the fiscal year ending March to 6.5%, with an upward bias, from a previous forecast of 5%.

Read more on

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern