Interest rates in the emerging world stay high

While the interest rates in the West remain low, those in the BRIC nations have been quite firm. while the rich world has been grappling with deflation, for these emerging economies especially India, inflation remains a key concern. In India at least, high inflation has been a problem for quite some time now. And the RBI is in no mood to ease rates unless this comes down within acceptable levels. If the Modi government gets its development agenda rolling and many of the supply side bottlenecks are done away with, then there are very good chances of inflation cooling off. And this will be a good enough signal for the RBI to also start reducing interest rates.