Rate cuts won’t revive India’s stalled growth
By Andy Mukherjee
SINGAPORE, Jan 29 (Reuters Breakingviews) – The latest
reduction in interest rates will be as futile as the previous
one nine months ago. GDP growth 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.
Full view will be published shortly.
CONTEXT NEWS
- The Reserve Bank of India cut its policy interest rate of
8 percent by a quarter-percentage point on Jan. 29, the first
reduction since April 2012. To ease liquidity conditions, the
monetary authority also pared the ratio of deposits banks are
mandated to keep with the central bank as cash by a
quarter-percentage point to 4 percent.
South Korea may need a rate cut to fight weak yen
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japan’s weak yen policy could be South Korea’s biggest economic enemy this year. The strengthening won, which has risen 23 percent against the yen in the past six months, was partly to blame for the country’s anaemic GDP growth in the fourth quarter. It’s also putting the squeeze on manufacturers like Hyundai. Lower interest rates could help to ease the pressure.
BOJ must now make its bold inflation goal credible
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
After more than a decade of feigning helplessness against falling prices, the Bank of Japan has finally signed up for combat duty.
Thailand’s unsustainable boom is piling up risks
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Thailand is booming again, but the foundations of its growth revival are wobbly. Unless policies and politics become more robust, the Southeast Asian nation’s economy may find its momentum hard to sustain.
India in depth: Crying out for corporate bonds
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
India is crying out for corporate bonds. The country’s bank-dominated financial system is not well-suited to fund the $1 trillion infrastructure investment targeted by the government under its current five-year plan. Corporate bonds could be a helpful alternative, but the authorities are stifling the development of a genuine debt market.
Modi’s Gujarat win doesn’t mean he will rule India
By Andy Mukherjee
SINGAPORE (Reuters Breakingviews) – Narendra Modi’s resounding election victory in Gujarat has made Indian businessmen optimistic. Many see his win, the third in a row, as a sign that the centre-right leader with a reputation for effective administration could be ruling the nation in 2014. But a chequered past, an autocratic personality and the peculiarities of India’s coalition politics make Modi less than a shoo-in.
The result of 2014 polls could be dramatically different from what investors are hoping for. A real possibility is that smaller regional parties come together to forge a weak, purposeless centre-left government – just to keep Modi out.
Japan’s fiscal stimulus is call for action to BOJ
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japan’s new prime minister has thrown the country’s central bank a $117 billion challenge.
India’s plan to shield IPO investors has merit
(The author is a Reuters Breakingviews columnist. The
opinions expressed are his own)
By Andy Mukherjee
SINGAPORE, Jan 11 (Reuters Breakingviews) – Indian
regulators have come up with a novel solution to the problem of
failed initial public offerings: give small investors who lose
money a refund. The proposal would appear to undermine the basic
idea that common shares represent ownership rights – and risks.
But unless company owners face consequences for ultra-aggressive
pricing, they won’t stop abusing their information advantage -
and the market for IPOs will remain moribund.
A how-to guide for Japan to escape deflation
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Japan has a real chance of ending deflation. But the authorities need to act boldly. It will be hard for the Bank of Japan to dispel a decade of accumulated pessimism by merely adopting a formal inflation target. The goal of the central bank and the finance ministry should be to make people believe that price gains that didn’t occur in the past 10 years will now take place. A de facto currency peg may be the way to engineer those expectations.
India’s corporate governance cleanup is welcome
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
India’s corporate culture is about to witness a shakeup. A new law will make it mandatory for most Indian companies to separate the role of the chief executive and the chairman of the board. The shift, already the norm in the United Kingdom but long resisted elsewhere, should help to narrow India’s governance discount.
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