The Reserve Bank of India has notched down its policy rate by 25 basis points. The economic argument favoring the cut centers on more constructive inflation data. But the newly formed rate-setting committee was also looking for an opportunity to assert policy oversight. The move will help to reverse sour sentiment toward India among global investors. Despite generous economic growth, cross-border names have largely ignored local assets. Indian stocks are up a dollar-based 8% in the year-to-date period through October 3. While it may be hard to match outsized gains elsewhere, stock-market performance still looks anemic by international comparison. Cross-border investors are protesting the failed pace of reform. As one example, Prime Minister Modi has referred to “hire and fire” in the labor market as a Western concept. ■
Learn more at the BBC.
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