Thursday, September 17, 1998
Absence of capital controls leads to chaos
Jagdish Bhagwati, Paul Drugman, and Jeffrey Sachs are throwing the weight of mainstream opinion behind some kind of control on international capital flows. That seems to have provoked a backlash, with free market fundamentalists rallying round in defence of capital account convertibility.
Err on side of caution
The RBI governor's speech at the Indian Banks Association's conference on international banking highlighted several of the issues faced by the banks. On top of the agenda, so far as Indian banks are concerned, is the high level of NPAs.
Japanese leanings must be curbed
The yen crashed to its eight-year low of 147 per US dollar on August 11 and the Japanese shares plunged to their 12-year lows on August 28. Though the yen bounced back in the later stage to 132 on September 2 and the shares made subtle recoveries, the volatility continues. The Japanese economic planning agency minister Taichi Sakaiya acknowledged the plight of the Japanese economy and expected that the GDP would pose negative growth in the first half of 1998.
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