Raghuram Rajan var chef för den indiska riksbanken (Governor of the Reserve Bank of India) mellan 2013 och 2016. Han är en av de få centralbankschefer som har yttryckt farhågor för den ultralätta penningpolitik bl.a. Riksbanken och ECB fortfarande bedriver. Följande internju med honom är från 2010 och tar sin avstamp i valutarelationerna mellan USA och Kina, men det han säger om ultralätt penningpolitik kan även överföras till hur bl.a. Riksbankens aggerar idag.
Comment
SPIEGEL: Professor Rajan, the tensions between the United States and China are rising, several countries are trying to weaken their currencies. Is this the beginning of a global currency war?
Rajan: This is certainly a skirmish, with countries using different tools to get an advantage. The industrial economies are using ultra-loose monetary policy, while the emerging markets are using currency intervention and capital controls.
SPIEGEL: Where are the risks?
Rajan: The tools they are using will create distortions -- both ultra-loose monetary policy and intervention risk creating excess liquidity and asset price bubbles. If capital is too cheap, we will tend to use it too much. If the exchange rate is too low, we will focus on producing for exports. And if tempers boil over, we could get ugly protectionism.
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SPIEGEL: Isn't it too early to think about higher interest rates? The problems are far from being solved. In Greece or Ireland, for example, the situation is still fragile and cause for worry.
Rajan: That's true. But as worries settle down we shouldn't wait too long to start the process of raising rates. Right now, there is not even a debate about whether this is an appropriate idea. People are focused too much on the benefits of low interest rates without considering the costs. The economy is drifting from bubble to bubble. We already made this mistake once, after 2002. There is the danger that we will repeat this mistake.
(www.spiegel.de - matters-could-escalate-economist-raghuram-rajan-warns-of-currency-conflict)
Comment
SPIEGEL: Professor Rajan, the tensions between the United States and China are rising, several countries are trying to weaken their currencies. Is this the beginning of a global currency war?
Rajan: This is certainly a skirmish, with countries using different tools to get an advantage. The industrial economies are using ultra-loose monetary policy, while the emerging markets are using currency intervention and capital controls.
SPIEGEL: Where are the risks?
Rajan: The tools they are using will create distortions -- both ultra-loose monetary policy and intervention risk creating excess liquidity and asset price bubbles. If capital is too cheap, we will tend to use it too much. If the exchange rate is too low, we will focus on producing for exports. And if tempers boil over, we could get ugly protectionism.
- - -
SPIEGEL: Isn't it too early to think about higher interest rates? The problems are far from being solved. In Greece or Ireland, for example, the situation is still fragile and cause for worry.
Rajan: That's true. But as worries settle down we shouldn't wait too long to start the process of raising rates. Right now, there is not even a debate about whether this is an appropriate idea. People are focused too much on the benefits of low interest rates without considering the costs. The economy is drifting from bubble to bubble. We already made this mistake once, after 2002. There is the danger that we will repeat this mistake.
(www.spiegel.de - matters-could-escalate-economist-raghuram-rajan-warns-of-currency-conflict)
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