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Tuesday, August 05, 2008

Five readings on currencies and monetary policy

Financial Express has an editorial on the outlook for the US dollar and for the rupee. In addition to their arguments, one needs to factor in the interest that policy makers ought to have in a strong rupee as a tool for combating inflation.

Martin Feldstein has a column on the outlook for the US dollar.

William Pesek has two good columns on Bloomberg: on Asian macro policy being out of whack, and on China's problems with inflation (which are a lot like ours).


  1. blogger offers a circular logic.
    High growth in india was CAUSED by loose policy due to pegging. Blogger wants to have cake and eat it too by saying that Rupee should be higher given the high grwoth etc etc.

    Indian rupee will hit 60 against dollar in 2 yrs as indian recession sets in against the backdrop of unfliching double digit inflation. Indian deficit now at 10% would climb to 15% in 2yrs.

  2. High growth was also caused by the insane real estate lending in India itself. A 2 BHK flat which used to cost INR 1500-2000 has now jumped to INR 4000-5000. And the banks are financing this to the IT guys, giving 10-30 lakh loans. Irresponsible lending practices are being followed. What happens when the IT guys start receiving pink slips and are unable to pay their INR 15,000 per month mortgages?

    Fact: India is also due for a much needed correction.

  3. Whoops it should read

    INR 1500-2000 per sq ft

    INR 4000-5000 per sq ft

  4. Thanks Ajay, It will definitely be helpful to all of us to get a clear look of what changes are happening recently.
    this is the nice information shared with us.


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