The additional federalism will have a limited effect on the Indian economy
- The Reserve Bank will wait for fiscal policies to curb inflation In these rural times, monetary policy will be based on local macro-economic conditions rather than global factors. However, measures to tighten liquidity by the federal and some other major central banks could force the RBI to adopt a less ambiguous tone at its next policy meeting in April. While its favorable trend must continue to support growth. U.S. The Federal Reserve's decision to raise interest rates for the first time in three years will only have a limited spillover effect on India, as markets have largely absorbed the impact, economists said. In addition, given the strong macroeconomic fundamentals, India is well prepared to withstand any external shock. The Reserve Bank and the government also have the tools needed to remove most of the extra spill, he added. In fact, the stock markets responded favorably to the Fed's rate hike. Foreign portfolio investors, the main channel for spillover, have pul...