India Must Raise Rates ‘Fairly Soon’ to Tame Prices, OECD Says
Nov. 19 (Bloomberg) -- India’s central bank must tighten its monetary policy “fairly soon” to rein in inflation, the Organization for Economic Cooperation and Development said.
“Given the magnitude of easing and the speed at which inflation has bounced back, monetary policy will need to be tightened fairly soon,” the Paris-based OECD said about India in a report released today.
Now, I am certain – as certain as I am that the sun will rise tomorrow – that I’ll receive a flurry of deflationist dissertations explaining away the rising tide of inflation. And I’ll continue to read those dissertations – and pass on the better ones to other members of the team for further evaluation and consideration. However, I must confess to becoming a bit hardened against the deflationists’ case, but only because everywhere I look, all I see are governments trying to outdo each other with stimulus in all its many guises. Which is to say, pursuing policies that can only be deemed highly inflationary.
