In the post-Ukraine war situation, the globalized economy that came three decades ago has been torn apart. Only those countries will be able to recover from thisWho will show the spirit of thinking new in the latest situation. Rest of the remedies are mahram bandage, which will not solve the problem.
The Reserve Bank of India has increased the interest rate more than expected. If we also take into account the sudden hike last month, the RBI has increased the interest rate by 90 basis points – that is, about one per cent – within two months. There are two challenges before the bank – rising inflation and preventing the exodus of foreign capital from the country. So these are the two criteria on which the success or failure of the changes brought in monetary policy will be judged. Despite the latest hike, the Reserve Bank has projected the inflation rate to be 6.7 per cent in the current fiscal. Clearly this is much higher than the target set by the Bank and the Government of India. So, due to increase in interest rate, inflation will come under control immediately, even the Reserve Bank does not expect it. On the other hand, capital outflow is taking place due to rising interest rates in America. With the increase taking place there, the Reserve Bank will be able to compete with the growth, adding that it will not be realistic from any point of view.
On the other hand, the effect of increasing interest rate will be on those businessmen / people who took loans liberally in the era of easy monetary policy. Now whether the loan is taken for setting up an enterprise, or for buying a house or car- the installments to be repaid on them will increase. It can be easily estimated that their consumption expenditure will decrease under the pressure of inflation and paying more installments. So this will be another hit on the market which is already suffering from low demand problem. Only those people who have invested in schemes like fixed deposits will benefit. However, it can be said that apart from the steps taken by RBI, it has no other option. If anyone can have an alternative, it is the government. Economists believe that the globalized economy, which came three decades ago after the Corona epidemic and especially the Ukraine war, has become turbulent. Only those countries will be able to recover from this, which will show the spirit of thinking new in the current situation. Rest of the remedies are mahram bandage, which will not solve the problem.
