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If you want the reasoning, this IMF paper[1] goes into the detail. Generally gist is development rate (like GDP) is high in developing country, so is the inflat
by anuvrat1 4y ago
If you want the reasoning, this IMF paper[1] goes into the detail. Generally gist is development rate (like GDP) is high in developing country, so is the inflation
[1: Inflation Targeting as a Framework for Monetary Policy]: https://www.imf.org/external/pubs/ft/issues/issues15/ https://www.imf.org/external/pubs/ft/issues/issues15/
- sabujp 4y agoIndia's central bank target inflation rate is 4% +- 2%, and even now the rate is still at 7-8% and they're in no hurry to try to reduce it (https://www.reuters.com/world/india/exclusive-india-govt-in-no-hurry-medium-term-inflation-target-sources-2022-09-21/ https://www.reuters.com/world/india/exclusive-india-govt-in-...).
- rhaway84773 4y ago7% inflation as opposed to a targeted high of 6% is very different from 7% (actually 8+%) inflation, from a targeted high of about 2-4% (the Fed doesn’t publish a range I believe…they only say they target 2%…in practice, historically, they’ve treated 2% as a high, but I believe thats changed since the Great Recession so I’ll generously assume a +-2% range). What’s even more relevant to the Indian situation is that much of that inflation is being driven by the strength of the dollar which has made imports more expensive. The U.S., of course, is on the other side of that problem. The ridiculously strong dollar means that solely currency effects should be making things cheaper for Americans.