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IMF chief defends rate hikes after Donald Trump slams ‘crazy’ Fed

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Nusa Dua (Indonesia) | Central bank rate hikes were a “necessary development”, International Monetary Fund (IMF) chief Christine Lagarde said on Thursday, a day after Donald Trump sent global markets tumbling by calling Fed increases “crazy”.

“It is clearly a necessary development for those economies that are showing much-improved growth, inflation that is picking up… unemployment that is extremely low,” Lagarde told a press briefing at the IMF’s annual meeting in Bali.

“It’s inevitable that central banks make the decisions that they make.” Trump’s comments Wednesday triggered a sell-off on Wall Street, with Asian markets opening sharply lower on Thursday in response. “I think the Fed is making a mistake. It’s so tight. I think the Fed has gone crazy,” the US president said.

But Lagarde added that uncoordinated developed-country rate hikes were contributing to destabilising capital outflows from emerging markets.

The financial outlook, combined with global uncertainty over trade tensions between Washington and trading partners like China, has created “a bit of an unprecedented situation” for the world economy, said Lagarde. “Clearly as a result of (rate hikes)… we see and we will continue to see capital flow movements,” she added.

“The fact that large central banks of advanced economies are not exactly all moving at the same pace is also probably accelerating that phenomenon.”

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Government likely to make announcement on RBI soon: Finance Secretary

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New Delhi | The government is likely to make an announcement regarding Urjit Patel’s successor as Reserve Bank of India’s Governor later in the day, Finance Secretary A N Jha said.

RBI has been rendered headless following Patel’s unexpected resignation, with immediate effect, Monday. Patel, who is the first governor since 1990 to step down before his term ends, in a brief statement, cited “personal reasons” for the decision.

The decision to quit comes four days ahead of a crucial meeting of the board of the central bank that could have discussed issues of simmering differences with the government. It is expected that the board meeting may be deferred as there is no regular governor.

Speaking to reporters, Jha said, some communication from the government on RBI is expected.

Patel’s three-year term was to end in September 2019, and he was eligible for a second term like most of his successors, barring a few like his outspoken predecessor Raghuram Rajan.

A Kenyan national who acquired an Indian citizenship prior to being appointed Deputy Governor of RBI in January 2013, Oxford-trained Patel was initially seen as toeing government line after he backed the November 2016 shock decision to overnight junk 86 per cent of the currency in circulation.

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Former Kerala Minister C N Balakrishnan dead

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Kochi | Veteran Congress leader and former Kerala minister C N Balakrishnan died at a private hospital here, party sources said Tuesday.

He was 84. Balakrishnan, a former Cooperation minister, undergoing treatment for pneumonia at a private hospital here and the end came late Monday night, the sources said.

He is survived by his wife and two daughters.

Chief Minister Pinarayi Vijayan and Leader of the Opposition in the state assembly Ramesh Chennithala were among those who condoled his death.

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Eminent economist Surjit Bhalla resigns from EAC-PM

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New Delhi | Eminent economist and columnist Surjit Bhalla on Tuesday said that he had resigned as part-time member of Economic Advisory Council to the Prime Minister(EAC-PM) on December 1.

“I resigned as a part-time member of PMEAC on December 1,” Bhalla said on social networking site Twitter.

The EAC- PM is headed by Niti Aayog member Bibek Debroy. Economists Rathin Roy, Ashima Goyal and Shamika Ravi are other part-time members.

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