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India is now the global coronavirus hotspot, with cases rising at more than 300,000 daily. The world's worst Covid-19 outbreak in India risks fanning price pressures, threatening to limit options for the inflation-focused central bank to support the economy. State-wise curbs to stem the virus are disrupting domestic supply chains, risking higher prices for everything from essential drugs to cars. A recent weakening in the rupee is worsening the situation, boosting the local cost of imported oil and other raw materials for manufacturing. While the Reserve Bank of India's looser monetary policies last year overlooked above-target inflation, further price pressure amid an expected economic recovery later this year may limit its options. Consumer price inflation is on course to test the upper limit of its 2 per cent-6 per cent target, while recent gains in wholesale prices signal more pressure to come.
Amid world’s worst Covid outbreak, rising inflation risks RBI’s monetary easing SECTIONS Last Updated: Apr 28, 2021, 07:17 AM IST Share Synopsis Consumer price inflation is on course to test the upper limit of the its 2%-6% target ETRetail Related By Anirban Nag The world’s worst Covid-19 outbreak in India risks fanning price pressures, threatening to limit options for the inflation-focused central bank to support the economy. Provincial curbs to stem the virus are disrupting domestic supply chains, risking higher prices for everything from essential drugs to cars. A recent weakening in the rupee is worsening the situation, boosting the local cost of imported oil and other raw materials for manufacturing.
Summary One of the key drivers of economic recovery in India will be the efficient movement of capital from inefficient firms to efficient ones. The economic downturn caused by the coronavirus pandemic has been severe, and India’s economy was one of the worst affected in 2020–2021. Though the economy is recovering faster than initial estimates, sustained economic recovery will not take place if stressed businesses cannot restructure their debts properly or if failing firms cannot be resolved efficiently. India’s bankruptcy law is key to solving these challenges. In 2016 India enacted the Insolvency and Bankruptcy Code, 2016 (IBC), which was a landmark reform to the nation’s financial system and the first comprehensive law to regulate insolvency.
The Indian central bank’s conventional as well as unconventional policy responses to support the economy through the pandemic failed to reduce the government’s borrowing costs by a lot, says a new study. Policy actions by the Reserve Bank of India have had only a modest impact on the ‘term premium’ –- an indicator of the market’s expectations of future interest rates, according to the research authored by Rajeswari Sengupta of the RBI-funded Indira Gandhi Institute of Development Research in Mumbai, and Harsh Vardhan of the SP Jain Institute of Management and Research. There were limits to which monetary policy alone could provide an economic stimulus during a crisis, they wrote in the ‘Ideas for India’ portal.
India's Monetary Policy Easing Wasn't Very Impactful, Study Says bloombergquint.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bloombergquint.com Daily Mail and Mail on Sunday newspapers.
Doubts raised over Indian central bank's COVID-19-related relief measures gulfnews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from gulfnews.com Daily Mail and Mail on Sunday newspapers.