Forex Blog: Currency Trading News & Analysis.

May 5th 2005

India raises rates to neutral level

India’s central bank recently raised interest rates to 5%, in a focused effort to contain inflation. India’s economy has been nothing short of impressive, and it is expected to grow by 7% this year. This is despite a below-average monsoon season, which is a perennial driver of Indian economic growth. Unfortunately for India, high economic growth has also been accompanied by high inflation, which India is now fighting to reign in. Indian central bankers also commented on the imminent revaluation of the Yuan. India has over $200 Billion in foreign exchange reserves, some of which is held in Chinese Yuan. Nonetheless, India is optimistic, asserting that the revaluation will actually benefit its economy, by making its own exports more competitive with Chinese exports. Reuters reports:

"We will have a look at it, watch it carefully. Our exposure to the Chinese economy is mainly through trade and there is nothing for us to be concerned about a trade effect," Reserve Bank of India (RBI) governor Yaga Venugopal Reddy told reporters.

Read More: Any yuan revaluation unlikely to hurt India

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Posted by Adam Kritzer | in Exotic Currencies | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.