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Friday December 1st, 2023
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Tax slabs should keep pace with inflation, dependent allowances should be considered
Deficits do not rise much in the year that a currency crisis is triggered, but in the stabilization year
Targeting GDP with easy money dates back to Scottish Mercantilist John Law and fully flexible policy to James Steuart.
High direct tax rates, capital consumption taxes, are not a substitute for monetary stability
Countries where inflationists cannot engage in macro-economic policy with money printing have low debt
If parliament rubber stamps a 4-6-pct inflation target, a second default is more certain
The new central bank goal and objective are a personification of the impossible trinity of monetary policy objectives
Reserves can be collected by impoverishing the poor, or by taking in their savings
Sri Lanka rupee appreciation explained
Mass sovereign default episode in the 1980s also followed a decade of bad money from the Fed
Converted budget support loans and conflicting PCs can lead to new external instability, discredit and derail reforms
The new law appears to have brought back policy conflicts dropped in a previous amendment
The inclusion of extensive macro-prudential laws is an admission that money is bad
A strike planned on March 01
IMF should stop the promotion of impossible trinity regimes with spurious claims to monetary policy independence
Call from Goh, Shenoy to provide sound money discarded in favour of depreciation, flexible regimes
| Latest | Last | |
|---|---|---|
| US Dollar | 330.2942 | 315.1016 |
| UK Pound | 429.0139 | 401.1871 |
| Euro | 372.1704 | 343.1959 |
| Aus Dollar | 227.2526 | 211.5951 |
| Yen | 2.3820 | 2.1908 |
| Latest | Last | |
|---|---|---|
| Indian Rupee | 3.6453 | 3.5932 |
| Korea Won | 0.2342 | 0.2292 |
| Oman Rial | 780.3569 | 769.4973 |
| Saudi Riyal | 80.1114 | 78.9849 |
| UAE Dirham | 81.7952 | 80.6569 |
| pts | % | |
|---|---|---|
| S&P SL20 | 2,573.80 | 1.00% |
| CSE All Share | 9,073.41 | 0.65% |
| Turnover Rs million | 1,591,766,524.95 | 1,029,335,694.32 |
| Latest | Last | |
|---|---|---|
| 3-m bill | 21.72 | 21.79 |
| 6-m bill | 19.55 | 20.31 |
| 12-m bill | 17.72 | 19.28 |
| 5-yr bond | 21.00 | 22.53 |
| 8-yr bond | 19.42 | 20.55 |
| today | yesterday | |
|---|---|---|
| Overnight Money | 13.93 | 14.00 |
| Gilt Repo | 13.50 | 14.00 |
| I-m SLIBOR | - | - |
Care should be taken to make sure that excess liquidity does not re-emerge from fictitious capital
In 1968 with Bretton Woods soft-peg hanging on a thread, advantages of currency board had become clear
That BOP deficits and reserve losses are caused by money printing is now hidden and victims are blamed
Fear of a DDR/IFR event drive rates even higher
Indian billion dollar credit line also works Undiyal fashion
It is through open market operations that money is printed to mis-target interest rates
The absolute discretion to print money through flexible inflation targeting cum output gap targeting has to be blocked
Forcing food importers to use LCs can create food shortages.
Steep rate hikes are needed to save the rupee
A flexible exchange rate fails because it is not rule bound
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