India’s me-too monetarism

Looser monetary policy may be the right response for the eurozone and Japan, but that doesn’t mean India should follow suit.

India’s me-too monetarism

India started to loosen monetary policy again last week. Many welcomed the move, but some of the strongest advocates of unorthodox monetary policy are asking if the Reserve Bank of India might be going in the wrong direction.

On January 29, the central bank cut its policy rate by 25bp to 7.75% and reduced banks’ reserve requirements by the same amount, and it is expected to cut rates by a further 50bp this year.

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