India in the world of (near) free money

The stance of the large central banks and recent changes in the policy framework mean that the cost of money in the global financial system would remain low in the foreseeable future

The latest projection by the Organisation for Economic Co-operation and Development shows that the global economy will contract by 4.5 per cent in the current year. Although economic activity is expected to recover in 2021, the pandemic-induced uncertainty would be enduring. Across the world, policymakers are aggressively intervening to contain the economic damage. While it is reasonable to expect that governments and central banks would want to do everything possible to avert an economic meltdown and nurture a durable recovery, some of the interventions made by large central banks will increase policy complications in emerging market countries like India.

The economic