The RBI decided to increase the base rate in the country with a quarter point to 5.75 percent. This is the second increase in interest within one month, the goal of tightening monetary policy to combat inflation. Over the past five months the appreciation of life in India is two-digit, and in July is expected to increase producer prices by 11 percent annually, Air Force forward. With a major contribution to this rise in prices of food and fuel. Last year, India became a victim of the biggest floods for the past 37 years. This significantly reduce agricultural harvests and the prices went up, the agency adds. Against the backdrop of high inflation in India and the government expects strong economic growth of 8.5 per cent this year. Today it became clear that India will also begin conducting stress tests of the banking system. Unlike the U.S. and Europe, however, the Government plans to introduce a regularity and banks to be tested every six months.
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The U.S. Federal Reserve will probably raise its main interest within six months, with between a quarter and half percentage points, according to a survey of the National Association of Business Economics (NABE), said. According to the survey, conducted every six months, most of NABE economists find this almost zero interest rate the Fed is appropriate. More and more of them, however, feel that it is too stimulating. “The majority believes that the increase in interest rates over the next six months is as likely and appropriate,” said NABE president Lynn Riyzar. According to the Fed’s high unemployment and low inflation to justify keeping interest rates extremely low for an extended period. The data indicate that the economy has gradually recovered and by some leaders of the Fed Reserve needs to start preparing the markets for the tightening of financial conditions. Economists interviewed by NABE, believe that the suspension of purchases of mortgage securities by the Fed will increase interest rates on mortgage loans with an average of 42 basis points. The program, worth 1.25 trillion. dollars, will be discontinued at the end of the month. 44% of the respondents believe that inadequate regulatory oversight was the main reason for the deep financial crisis, which led the country to a painful recession.
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