Insignia Consultants | India's FX priorities challenge 'impossible trinity' assumptions
India's FX priorities challenge 'impossible trinity' assumptions
6 hours ago
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MUMBAI, March 12 (Reuters) - India's central bank is prioritising currency stability over concerns about credit market tightness, defying wider market expectations it would need to let the rupee fall more if it is to free up funds for a faltering economy.
The Reserve Bank of India (RBI) cut its key interest rate for the first time in nearly five years in February, seeking to arrest the alarming slowdown in growth.
Analysts say India, like other emerging markets, is currently facing what is known as the "impossible trinity" - the principle that economies cannot simultaneously control monetary policy and the exchange rate while letting capital flow freely.
