Both have ruled out any immediate increase in interest rates to tame inflation as that could smother the fledgling economic recovery post-Covid. Persistent high inflation will force them to increase interest rates and such a move may impact emerging markets including India. Increase in interest rates in the US or Europe will cause some of them to shift to those markets. Central banks of Brazil and Russia have already started raising interest rates. Argentina’s central bank has, so far, refused to do so despite the high inflation and Turkey chose to do the opposite — reduce the rates.

Source: The Hindu November 22, 2021 20:14 UTC