, Columnist
Templeton Fund Freeze Leaves a Dangerous Hole
India's central bank must step in to provide liquidity and prevent contagion.
Aid for stalled housing projects was too little, too late.
Photographer: Dhiraj Singh/Bloomberg
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India’s deepening credit crisis has taken a dangerous turn with Franklin Templeton’s local unit putting six of its debt mutual funds into suspended animation. Before fear guts the economy, the central bank needs to open its cash vaults.
At $4.1 billion, the amount of investor money that’s stuck may not seem systemically important. India’s $2.7 trillion economy has witnessed much larger financial failures in the recent past. But with the coronavirus lockdown decimating incomes and sentiment, leaving the hole unfilled may prove an error of judgment.