Wage subsidy could blunt Singapore’s edge
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Singapore’s government hopes that new subsidies for low-wage workers will fix two problems: pressure on company profits, and income inequality. But in doing so, it will just create new problems later on.
Soaring kiwi dollar tests faith in inflation goal
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
New Zealand’s overvalued kiwi dollar is testing its central bank’s single-minded devotion to price stability. The country, the first in the world to formally adopt inflation targeting as a monetary policy tool in 1990, is struggling to defend the regime following the four-year, 65 percent rise in the local dollar against the US currency.
Southeast Asia’s growth could lead to credit curbs
By Andy Mukherjee
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Southeast Asia’s heady debt-fuelled growth is beginning to resemble the unsustainable mid-1990s boom. But authorities are shy to raise interest rates as doing so could attract more overseas capital, stoking inflation and financial instability. Direct curbs on credit and capital flows may prove more attractive.
Breakingviews: India in depth: Budget must ease credit crunch
By Andy Mukherjee
SINGAPORE (Reuters Breakingviews) – When finance minister Palaniappan Chidambaram stands up to present his government’s annual budget on February 28, the biggest quandary he will face is: “What can I say in the next two hours that will boost both the demand for credit and its supply?”
- The right answer to that question has three parts: To recapitalise state-run lenders to the extent the government’s meagre resources permit; to hand out new banking licences; and to remove the obstacles that prevent global banks from including India in the list of countries where they would like to deploy more of their shareholders’ money.
India in depth: Budget must ease credit crunch
(The author is a Reuters Breakingviews columnist. The
opinions expressed are his own)
By Andy Mukherjee
SINGAPORE, Feb 19 (Reuters Breakingviews) – When India’s
finance minister Palaniappan Chidambaram stands up to present
his government’s annual budget on Feb. 28, the biggest quandary
he will face is: “What can I say in the next two hours that will
boost both the demand for credit and its supply?”
Next BOJ chief should accept monetisation
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The Bank of Japan has a morbid fear of directly financing fiscal deficits. But this “no monetisation” creed sits ill with the $1 trillion or so of public debt – roughly a fifth of the Japanese GDP and about 14 percent of the net outstanding public debt – which it has already turned into money. The next BOJ governor, who will take over when the incumbent Masaaki Shirakawa steps down on March 19, should be more realistic.
Interview questions for the new BOJ chief
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japanese Prime Minister Shinzo Abe’s war on deflation will soon have a new general. A hard-charging Bank of Japan governor with strong conviction and oodles of savvy could help bring Abe’s plan to fruition.
Singapore’s demographic engineering on right track
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Singapore’s audacious proposal to squeeze 30 percent more residents on a tiny island between now and 2030 is fraught with political risks for the ruling party. Voters won’t like it. But it’s prudent economics.
Breakingviews: RBI rate cuts won’t revive India’s stalled growth
By Andy Mukherjee
SINGAPORE (Reuters Breakingviews) – The RBI’s latest interest rate cut won’t revive growth. The central bank’s quarter-percentage point reduction in the policy rate, to 7.75 percent, is just as futile as the last one almost a year ago. GDP will pick up when New Delhi curbs its own profligacy and improves the investment climate. The February budget may be the current government’s last chance to do both.
If companies aren’t investing, it isn’t because monetary policy is too tight. With 10.6 percent consumer-price inflation, the base rate for borrowing in 10-year bonds was already negative in real terms before this last rate adjustment. Rather, the government’s quest to fund itself is crowding out the private sector. Banks are forced to buy up government bonds, meaning two-thirds of what households save in a year is reinvested in public debt.
Rate cuts won’t revive India’s stalled growth
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
By Andy Mukherjee
India’s latest interest rate cut won’t revive growth. The central bank’s quarter-percentage point reduction in the policy rate, to 7.75 percent, is just as futile as the last one almost a year ago. GDP will pick up when New Delhi curbs its own profligacy and improves the investment climate. The February budget may be the current government’s last chance to do both.
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