, Columnist
The Case for QE in India Is Getting Stronger
Rate cuts have lost their firepower. It’s time to consider unconventional measures.
There’s not enough of this around.
Photographer: INDRANIL MUKHERJEE/AFP/Getty Images
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With India’s nominal GDP growing at its slowest pace in 17 years, it’s a given that the central bank will cut interest rates again this Thursday.
What’s the point, though? Commercial bank lending rates have turned immune to monetary policy, so much so that a sixth reduction this year in the benchmark price of money will make hardly any difference. The only medicine that can work is quantitative easing, a remedy authorities aren’t even discussing. QE may not cure the patient, but it may well succeed in bringing India’s economy out of a coma.