Abheek Barua
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Does Monetary Policy Need a New Paradigm?
The Reserve Bank of India has just raised interest rates and shifted its monetary policy stance to calibrated tightening. But is the central bank confronting an inflation problem that conventional monetary policy is no longer equipped to handle? For decades, central banks have distinguished between temporary supply shocks, which they could largely look through, and demand-driven inflation, which they could address through interest rates. But what happens when supply shocks are no longer temporary?
Could Indonesia’s Sovereign Fund Show India a Better Way?
An important piece of news out of Asia last week seems to have got lost in the hype surrounding the SpaceX IPO launch. Indonesia’s new Sovereign Asset Fund (SAF), Dananatara, saw its debut $1.5 billion bond issue in international markets massively oversubscribed. This was despite the fact that global investor sentiment towards other Indonesian assets has remained tepid, if not downright hostile. Why bother with Danantara?
Will India Once Again Turn to Its Diaspora for Capital, and Will It Work?
The Indian government seems to be reopening its old playbook of stabilising the rupee by raising foreign currency funds from the Indian diaspora. The first chapter of this playbook was incidentally written first in 1991 with the issuance of the India Development Bonds. Resurgent India Bonds were floated in 1998 followed by India Millennium Deposits in 2000. In 2013 the RBIopened a subsidised swap window to incentivise banks to raise FCNR deposits.
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