India Warns of Global Currency War

Reserve Bank of India Governor Urjit Patel has warned that the world is probably at the cusp of the beginning of a global currency war, Sputnik reported. Patel said this while claiming that the RBI has been taking a cautious approach against the backdrop of ongoing geopolitical risks and that it is trying very hard to maintain the country’s growth rate above 7%. “Already, we have seen the turbulence for a few months and it is likely to continue, for how long we don’t know. We are possibly at the beginning of a currency war. We are running a tight ship to ensure macroeconomic stability in order to be able to maintain 7-7.5% growth rate,” Patel said at a media briefing after the monetary policy announcement on Wednesday. RBI has increased the lending rate to commercial banks by 0.25% to 6.5%; the second consecutive hike this financial year ending March 2019. The RBI has taken a hawkish stance on inflation against the backdrop of a hike in the minimum support price for farm producers guaranteed by the Narendra Modi government and the rise in salary of government employees.