India RBI begins tightening cycle, ups banks’ reserve ratio

Following on China’s lead the Central Bank of India is tigthening monetary policy and has indicated that there is more to come. As the old adage goes ” Don’t fight the FED”, of China and India that is.

Tighthing monetary policies such as raising bank reserve requirements and raising interest rates are tools Central banks use to slow down the economy and arrest inflationary pressures. Tends not to bode well for both equity and bond markets.

See the story here.

This entry was posted on 29. January 2010 at 14:44 and is filed under Investing, Economics, Fixed Income. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.