........ The more immediate impact of the Fed’s decision, however, is to give RBI more room to ease policy rates, certainly to start dismantling the ‘interest-rate defence’ wall put up on July 15 which boosted interest rates 300bps immediately—the wall comprised not just the hike in MSF rates but also changes in CRR balances and LAF limits among others. Many argue lowering rates is bad idea since the rupee hasn’t quite stabilised and inflationary expectations also need anchoring. Since the Fed’s action means the dollar will weaken, the rupee gets an automatic stabilizer; also..........
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