Monetary Policies in Recent Times

Abstract

The quintessence of monetary policy is containing inflation, while maintaining growth. It is the inflation-growth trade-off. Central Banks such as Federal Reserve in the United States (US), European Central Bank (ECB) to those in Canada, China, Japan, India, Nigeria, Turkey, Bangladesh, and Sri Lanka among others have recently altered the interest rates to suit their existing economic conditions. This has an impact on currency as well as domino effect on industries and other businesses. Their capex cycle gets affected. There is an impact on Equated Monthly Instalments (EMIs) on consumer loans. The Net Interest Margins (NIMs) of banks are also affected. Ceteris paribus, there is an impact on GDP growth and international trade as well. With climate financing and carbon neutrality gaining currency, the inextricable and inevitable link between weather and agricultural output came to the fore. This got accentuated by global warming in general and El Nino in particular.

1. Introduction

Monetary policy is set out by the Central Bank of a country to control the overall money supply and achieve economic growth. Policy makers have instruments such as interest rates, reserves, bonds and so on. Decisions are taken by the Central Banks to influence the availability and cost of money in a bid to attain targets of economic growth (as measured by Gross Domestic Product (GDP)), employment growth and price stability. Monetary policies have undergone changes in various developed and developing countries to combat inflation, while not sacrificing on the growth front. The tools of Monetary policy are Open market operations (buying and selling government securities to expand or contract money supply), reserve requirements and discount rate. Meeting inflation target is a crucial aspect in the making of monetary policy.

Roy [1] pointed out that interest rate is the price of money. It depends on the demand and supply of money. Interest rate is a predominant tool of demand management. Individuals and investors bank on money to buy goods and services. Central banks can increase aggregate demand or contain it by altering money supply and as such, the interest rates.

2. Objectives

The objectives of the chapter are the following:

• To review the global economic and financial conditions;

• To discuss the changes in monetary policies of select countries chronologically and their influence on the global economic scenario;

3. Methodology

An analysis of global scenario as regards prices of commodities at the international level, disruptions in global value chains, irritants in the geopolitical sphere, is done from February 2022 to August 2023. The US and Egypt serve as representative sample of developed and developing countries respectively. As regards Eurozone, UK, Turkey and India, a brief note on their monetary policies is drawn. In other words, a macro picture is done, which was followed by meso, viz. country-level analysis. Only discount rates/interest rates have been taken into consideration for this study.

4. Recent literature review

Dornbusch, et al. [2] stated the impact of quantity of money on the economy, whereby there is an increase in output, by reducing interest rates. They spelt out the transmission mechanism, the process by which alterations in monetary policy impact aggregate demand. Lang and Schadner [3] outlined the predominance of resolving the Impossible trilemma without the currency and financial stability. They came up with a new theoretic trilemma model for a monetary union. Azad and Serletis [4] elucidated that the uncertainty in the US monetary policy, regardless of the way in which it is measured, has negative impact on the macroeconomic and financial fundamentals of emerging economies. They dwelt upon the spillovers emanating from monetary policy uncertainty in the US to the policy rates of 7 emerging economies which implemented inflation targeting. Benigno, et al. [5] explain how the policy responses of European Central Bank (ECB) to the pandemic crisis (using an event-based analysis) have influenced the European financial and economic system. These responses have had positive impact on European economic system by increasing lending by banks and by making space for expansionary fiscal policies in the Eurozone’s high debt countries which do not have fiscal wherewithal. Guizani and Wierzbowska [6] assessed the monetary policy stance in three countries, viz. Tunisia, Egypt and Morocco, based on the Taylor-rule framework. They identified the effect of transition periods and high uncertainties after the Arab Spring, on the decision-making process of Central bank. Results showed that they still largely depend on discretion while deciding their policy rates. However, there is significant interest rate inertia in the policymaking of these countries. The policy rates in Egypt and Tunisia depend on the variations of exchange rates. The monetary policies are more intensely responsive when the inflation rate exceeds an intermediate target.

Ferroni, et al. [7] put forth model-based evidence that the robust monetary tightening done by the Fed in 2022 is in consonance with its historical behaviour. As per this model, the gradual pace does not reduce the ability of the Fed to pursue price stability. As per a report in 2023 of US Bank, the issue of the Fed’s commitment to reversing Quantitative Easing (QE) was touched upon. This “quantitative tightening” approach coupled with higher interest rates, is tailored to tackle inflation by slowing economic growth. Harari [8] stated that, in the UK, the monetary policy committee started to lower the size of its Quantitative Easing (QE) programme in September 2023. It was from the peak value of GBP 895 billion to 760 billion.

Gutierrez-Diez and Pa’l [9] highlighted the part played by expansionary monetary and fiscal policies, reduced credit flows, decline in price levels and sombre real activity in Eurozone from the onset of global financial crisis. Dua [10] outlined the evolution of monetary policy framework in India since the mid-1980s, transmission process, and its constraints w.r.t. lags. Gurkaynak et al.[11] elaborated the result of a large change in monetary policy rule from the angle of a standard New Keynesian model. It indicates how Neo-Fisherian disinflation may work or not, both in theory and practice. The Taylor principle was not satisfied, attributable to the frequent changes by policymakers in order to keep the rates low. The experiment, as regards monetary policy in Turkey during the past decade comes from a government belief that higher interest rates lead to higher inflation, gives an exogenous variance in the policy rule.

5. Global scenario

The economic scenario at the global level is analysed below in terms of global commodity prices, financial conditions, supply chain issues and geopolitical concerns. It is done for the period of February 2022 till August 2023, in a chronological manner (Table 1).

Country/region	Inflation target (%)
USA	2
UK	2
Eurozone	2
Australia	2–3
New Zealand	1–3
Philippines	2–4
Chile	2–4
Indonesia	2.5–4.5
South Africa	3–6
India	2–6
Egypt	5–9

Table 1.

Inflation target of different countries/regions.

Source: Collated from www.bis.org

The above table gives the inflation target of various countries/regions- both developed and developing. Given below is the elucidation of global scenario.

February 2022: The global commodity prices were higher than in the previous period and fiscal consolidation measures took place. There was continuation of recovery in global economic activity from Covid-19 and subsequent supply chain disruption. Financial conditions at the global level were largely accommodative. However, they are slated to tighten over the medium-term as monetary policy is expected to normalise earlier than forecasted. International prices of oil have continued to register an increase, which were at the highest level since the outbreak of Covid-19.

March 2022: Just as the global economy came out of the pandemic-related disruptions, the inflationary pressures continued to build. These pressures got intensified due to Russia-Ukraine conflict. Further, rise in international commodity prices, emanating from supply chain disruptions and enhanced risky sentiment contributed to inflationary pressures and imbalances on the external front.

May 2022: There was slowdown in global economic activity because of continued tensions between Russia and Ukraine. Global commodity prices, especially oil and wheat, remain elevated due to trade sanctions on Russia and the concomitant supply chain issues. The international prices of the said commodities got affected, with the latter influenced by adverse weather conditions and poor harvests in some areas. There was tightening of financial conditions at the global level. This is because major central banks continue to increase policy rates and reduce asset purchase programs in a bid to contain inflationary expectations. At this time, lockdowns for Covid-19 were imposed by China, which led to further disruption in global value chains.

June 2022: Global economic activity slowed down on account of ongoing economic tensions between Russia and Ukraine and the subsequent supply chain disruptions. There were tighter global financial conditions, as major central banks went further to tighten policy rates and reduce asset purchase programs, in order to combat inflation.

August 2022: There was continuation of slowdown in global economic activity. It was impacted by spillovers from Russia-Ukraine conflict, in addition to enhanced geopolitical risk in South-East Asia. As major central banks continued to hike policy rates, global conditions were tight. There was a slight decrease in global commodity prices.

September 2022: The Russia-Ukraine conflict continued to levy its influence. The slight decline in global commodity prices such as oil due to lower demand, which in turn was because of global recessionary expectations.

October 2022: There have been unprecedented shocks and challenges for the global economy. There was Covid-19 pandemic that led to lockdowns, followed by Russia-Ukraine conflict.

December 2022: There was slight easing of international commodity prices. Moreover, financial conditions witnessed stabilisation, with many central banks pointing out that their inflation may have reached peaks and started a reducing path.

February 2023: There was relaxation of Covid-19 restrictions in China and Russia-Ukraine war, which were the prominent global issues at that time.

March 2023: Reopening of China, banking sector issues in developed economies resulted in huge volatility in the US and EU.

May 2023: There was decline in energy prices, leading to a decrease in supply chain bottlenecks and a decline in volatility.

June 2023: Inflation globally was above targeted levels.

August 2023: There is persistent high inflation at the global level.

6. Domestic scenario

The domestic economic and financial scenario is analysed below for a representative sample of US (developed world) and Egypt (developing world).

6.1 United States of America (USA)

The table below gives the target range of federal funds rate in the US vis-à-vis the respective date of monetary policy (Table 2).

Date of Monetary Policy	Target range of federal funds rate (%)
25–26 January 2022	0–0.25
15–16 March 2022	0.25–0.5
3–4 May 2022	0.75–1
14–15 June 2022	1.5–1.75
26–27 July 2022	2.25–2.5
20–21 September 2022	3–3.25
1–2 November 2022	3.75–4
13–14 December 2022	4.25–4.5
31 January−1 February 2023	4.5–4.75
21–22 March 2023	4.75–5
2–3 May 2023	5–5.25
13–14 June 2023	-do-
25–26 July 2023	5.25 to 5.5

Table 2.

Date of monetary policy and target range of federal funds rate in US.

Source: www.federalreserve.gov

January 2022: There was continuation of strengthening of economic activity. Covid-19 pandemic cast its influence on many sectors. But, they have improved. However, there has been a sudden rise in Covid-19 cases. The job gains have been stable. Inflation remains elevated, with supply and demand imbalances with respect to Covid and the subsequent reopening of economy. There was accommodative stance in the financial scenario, with a flow of credit to households and businesses in the US. The path of economy is a function of the course of coronavirus, with the vaccination program and an easing of supply constraints, which are slated to lend support to various economic activities and employment.

March 2022: The economic indicators continued to intensify. Job gains were strong. Inflation remained elevated. The invasion of Ukraine by Russia is causing humungous human and economic ramifications.

May 2022: The spending by households and capital invested by companies was strong. Job gains were robust. Inflation was elevated. The lockdowns with respect to Covid tend to exacerbate supply chain disruptions.

June 2022: There was an uptick in overall economic activity, after slowing down in Q1. The job gains were strong. Inflation remained elevated.

July 2022: Indicators of household spending and production have moderated.

September 2022: There was limited growth in spending and production. The other indicators remained roughly the same.

November 2022: There was ordinary growth in spending and production. Job gains were significant. Inflation was elevated, due to demand-supply imbalances, higher food and energy prices and other price pressures.

December 2022: There was reasonable growth in spending and production. Job gains were robust. Inflation was high, the reason being the same as aforementioned one. The Russia-Ukraine war is leading to higher prices and inflation, while affecting economic activity too, in the form of exogenous shocks.

January-February 2023: Economic activity witnessed ordinary growth. The job gains were strong. Inflation moderated to a certain degree, but was still elevated.

March 2023: The modest growth in spending and production continued. Job gains witnessed an increase of late. Inflation was still high. There were issues in banking system and financial conditions. The credit scenario for households as well as businesses became tighter.

May 2023: The economic activity registered increase at a gradual pace. Employment scenario was robust. Inflation remained elevated. The US banking system was resilient.

For June and July 2023, the above-mentioned conditions hold good, according to Federal Reserve press releases [12, 13].

6.2 Egypt

The details of date of monetary policy vis-à-vis the changes in discount rate in Egypt are given in the table below, after which the domestic scenario is elucidated (Table 3).

Date of Monetary Policy	Discount rate (%)
3 February 2022	8.75
21 March 2022 (Special meeting)	9.75
19 May 2022	11.75
23 June 2022	11.75
18 August 2022	11.75
22 September 2022	11.75
27 October 2022 (Special meeting)	13.75
22 December 2022	16.75
2 February 2023	16.75
30 March 2023	18.75
18 May 2023	18.75
22 June 2023	18.75
3 August 2023	19.75

Table 3.

Date of monetary policy and discount rate in Egypt.

Source: www.cbe.org.eg

6.3 Domestic scenario in Egypt

February 2022: There was expansion in economic activity and it clocked the highest real GDP growth rate since the beginning of quarterly series in FY 2001–2002. The corresponding period last year observed the measured relaxation of Covid-19 containment measures. There was increase in employment.

March 2022: The reform package in Egypt positioned the economy on a solid foothold, in order to combat emerging economic disruptions. Central Bank of Egypt emphasised the significance of exchange rate flexibility, which functions to absorb shocks in order to conserve the competitiveness of Egypt.

May 2022: There was expansion in domestic activity at a year-on-year growth rate of 8.3%. It was the second highest real GDP growth rate since Q3 of 2002. This was because of strong growth in tourism, construction and manufacturing. There was a decline in unemployment rate. Annual headline urban inflation and core inflation continued their increasing trend, which was due to rising prices of food and non-food products too.

June 2022: The domestic economic activity registered a slower pace of growth. Tourism, non-petroleum manufacturing and trade have contributed to growth. There was reduced effect of positive base effect. The annual headline urban inflation and annual core inflation registered an increase, albeit at a slower pace. This was on account of rising prices of non-food products. Food inflation witnessed deceleration for the first time since the beginning of the year due to reversal of supply shock.

August 2022: GDP expanded in the light of increased economic activity. Extractions form natural gas and Suez Canal lent succour to public sector activity. The inflation indices increased, which was attributable to higher prices of core food, retail products and services.

September 2022: The growth rate of GDP declined. Unemployment rate was stable, as both employment and labour force registered increases of similar magnitudes. Both headline and core inflation had risen, with the increase being due to supply side problems such as global commodity prices.

October 2022: Egypt weathered large capital outflows and increasing commodity prices. The disinflation path began in 2017, had been on the right corridor before the recent global shocks had sprung up.

December 2022: There was an uptick in economic activity. But, the unemployment rate too had increased. The annual headline urban inflation as well as core inflation increased, with the former registering the highest increase since December 2017 and the latter with its highest rate since November 2017. Inflation got affected by the depreciation of Egyptian pound.

February 2023: There was growth in real GDP, which was led by tourism, agriculture and trade. The annual urban headline inflation and core inflation increased, with their values being 21.3% and 24.4% respectively in December 2022. There has been front-loading of policy rate hikes by 800 basis points in 2022 alone, to combat inflationary pressures.

March 2023: There was decline in GDP growth rate on the domestic front. Annual headline urban inflation was at 25.8% in January 2023 and 31.9% in February 2023. Annual core inflation was at 31.9% in January 2023 and 40.3% in February 2023, which was at a historical high. The reason was domestic disruption in supply chains, depreciation of Egyptian pound and demand side pressures. These developments lead to additional tightening on the monetary side, both from cost-push and demand-pull factors of inflation.

May 2023: Unemployment was lower. Annual headline urban inflation declined in April 2023, which was the first decline since June 2022. Annual core inflation broke the rising trend that was manifest since the middle of 2021. The reason for the change was on account of favourable base effect and moderating of inflationary shocks.

June 2023: The GDP growth was lower on the domestic side. There was economic activity from the private sector, in addition to the inputs from trade, agriculture and construction. Inflation, both headline and core, increased, which was due to higher prices of food and non-food products.

August 2023: Economic activity was bolstered by the backing of tourism, agriculture and construction. Inflation increased due to unrelenting supply shocks and the increase in prices of Consumer Price Index (CPI)-based products.

Future path of inflation is a function of cumulative tightening as regards the stance in monetary policy till date and the lag with respect to monetary policy transmission. Monetary tightening is a prerequisite to attain inflation target; the path that future policy rates take is a function of forecasted, rather than current inflation rates.

7. Analysis in other countries/regions

A broad analysis of economic and financial conditions is drawn out for other countries/regions.

7.1 United Kingdom (UK)

The data reveals that there has been consistent increase in the Bank rate in UK from February 2022 onwards till August 2023. As in August 2023, there was a prominent growth in wage growth. Unemployment rate also registered a rise. Core and services CPI inflation were high. The indicators, viz. July S& P Global/CIPS UK Composite PMI weakened. 12-month CPI inflation declined from 8.7% in May 2023 to 7.9% in June. The table below gives the changes in bank rate and the respective date of monetary policy in UK (Table 4).

Date of Monetary Policy	Bank rate (%)
3 February 2022	0.5
17 March 2022	0.75
5 May 2022	1.0
16 June 2022	1.25
4 August 2022	1.75
22 September 2022	2.25
3 November 2022	3.0
15 December 2022	3.5
2 February 2023	4.0
23 March 2023	4.25
11 May 2023	4.5
22 June 2023	5.0
3 August 2023	5.25

Table 4.

Date of monetary policy and Bank rate in UK.

Source: www.bankofengland.co.uk

7.2 Eurozone

The following table gives out the data as regards date of monetary policy and the fixed rate tender in Main Refinancing Operations (MRO) in Eurozone. Data analysis shows that there was increase in the said rate, throughout the given period of study. There was a steady increase in the rate during the given period. As Lagarde and de Guindos in July 2023 [14], services, especially tourism are performing well, although it may be short-lived. The strong job market kept the unemployment at its lowest level from the time euro had come into the picture. Multitudinous jobs were created, with specific reference to services sector. Inflation has reduced further. There was softening of energy prices, but food prices had risen, though the growth rate was not as high as before. Travel and holidaying have become more costly. There has been an increase in wages and profit margins too. Increased interest rates imply that the number of businesses requiring loans is fewer. There has been transmission of previous rate hikes. As such, financing conditions are tight and are stifling demand. Interest-sensitive facets of demand such as housing investment in housing and business in Eurozone were those of weakness.

As given by Schnabel [15], the energy shock is still influencing the economy as it is a structural development and not cyclical one. This is on account of prolonged higher prices of inputs. Price volatility and thereby uncertainties too are on the higher side. Exports from Eurozone, which are as on date, lower because of fragile global demand, may be better off, given a more buoyant US economy. Simultaneously, a further slowdown in China would possibly have the opposite impact (Table 5).

Date of Monetary Policy	Main refinancing operations: Fixed rate tender (%)
27 July 2022	0.5
14 September 2022	1.25
2 November 2022	2.0
21 December 2022	2.5
8 February 2023	3.0
22 March 2023	3.5
10 May 2023	3.75
21 June 2023	4.0
2 August 2023	4.25

Table 5.

Date of monetary policy and fixed rate tender in Main refinancing operations in Eurozone.

Source: www.ecb.europa.eu

7.3 India

The table given as under highlights the changes in repo rate (the rate at which banks borrow from Reserve Bank of India (RBI) and is the signalling rate) as at the specified dates of Monetary policy statements. There was increase in repo rate from April 2022 till February 2023. The Monetary Policy statements in April, June and August 2023 left the repo rate unchanged and status quo policy was followed. It was said to be a ‘pause, not a pivot’ (Table 6).

Date of Monetary Policy	Repo rate (%)
10 February 2022	4.0
8 April 2022	4.0
4 May 2022	4.4
8 June 2022	4.9
5 August 2022	5.4
30 September 2022	5.9
7 December 2022	6.25
8 February 2023	6.5
6 April 2023	6.5
8 June 2023	6.5
10 August 2023	6.5

Table 6.

Date of monetary policy and repo rate in India.

Source: www.rbi.org.in

7.4 Turkey

The table given below brings out the changes in 1-week repo rate along with the respective date of monetary policy. The one-week repo rate became the policy rate of Central Bank of Republic of Turkey (CBRT) on 1 June 2018. The said rate was lowered from August 2022 till February 2023, after which it was unchanged till May 2023. Later, it was hiked in June, July and August 2023 too. The Monetary Policy and Liraization Strategy for 2023 (as on December 2022) revealed macroeconomic developments such as the following: Strong economic activity in the first three quarters of 2022; negative supply shocks, which were exacerbated by the Russo-Ukraine war and other heightened uncertainties. However, inflation continued its rising pattern, though at a falling rate. The policy as regards grain corridor helped in alleviating the influence of negative supply shock, which waned to a great extent (Table 7).

Date of Monetary Policy	1-week repo rate (%)
19 August 2022	13.0
23 September 2022	12.0
21 October 2022	10.5
25 November 2022	9.0
24 February 2023	8.5
27 April 2023	8.5
25 May 2023	8.5
23 June 2023	15.0
21 July 2023	17.5
25 August 2023	25.0

Table 7.

Date of monetary policy and 1-week repo rate in Turkey.

Source: www.tcmb.gov.tr

8. Impact on consumers, businesses and economy

Changes in key interest rates by central banks have a profound impact on consumption demand, investment demand and thereby aggregate demand too. If the interest rates are high, the Equated Monthly Instalments (EMIs) of consumers would increase. Increase in interest rates is an important factor which influences credit offtake. Aggregate spending is expected to have an impact as the previous hikes in policy rates influence it with lags in transmission. The capex cycle of businesses would get affected and debt servicing would increase. The Net Interest Margins (NIMs) of banks would take a hit.

Kemoe et al. [16] stated that many African currencies depreciated against US Dollar (USD). A 1 percentage point increase in the rate of depreciation against USD results in (on an average) an increase of inflation of 0.22 percentage points within the first year. However, inflation does not reduce fast enough when local currencies appreciate vis-à-vis USD (Source: IMF).

9. Negative interest rates

Jorgensen and Risbjerg [17] showed how countries such as Switzerland, Denmark and Japan have had negative interest rate regime. Denmark ended an approximately decade-long period of negative interest rates in 2022. Lenders in Denmark set forth negative interest rates on customers’ deposits. Lower margins are generated on lending. The current account rate, which is the benchmark rate in Denmark, was raised by 75 basis points from a negative interest rate of −0.1% to 0.65% in September 2022. The Danish Central Bank stated that its rate hike was a result of the increase by European Central Bank. Danish economy was on the precipice of overheating.

The Bank of Japan applied a negative interest rate of −0.1% to the policy rate balances in current accounts held by financial institutions at Bank. The Swiss National Bank (SNB) policy rate was negative from January 2022 till 22 September 2022. It entered positive territory from 23 September 2022, when it was changed from −0.25% to 0.5%. The above data is from the site of World Population Review [18].

10. Climate-related issues and monetary policy

As per Mr. Rajeshwar Rao [19], Deputy Governor, RBI, the climate risks are of two types, viz., physical risks and transition risks, which influence macroeconomic decisions. For example, wildfires, storms and floods are the physical risks. Extreme weather conditions can cause disruption in production as well as supply chains, which could lead to shortage of essential goods and services. This could result in increased prices, thereby leading to inflation.

Heat waves in addition to fluctuating rainfall trends, on account of El Nino, are likely to affect crop yields. This leads to uncertain conditions for producers and consumers. In the Eurozone, investment in equipment and machinery was resilient thus far, notwithstanding tighter financing situation. It was observed that there was an relieving impact of climate change as regards loans to green companies. On the other hand, there was a shrinking effect with regard to loans to companies based on fossil fuels.

Critical water routes such as the Panama Canal are drying up, further aggravating the supply chain concerns.

11. Outlook

CPI inflation is slated to decline during the remaining part of the year, bringing to light the lower energy prices. Services CPI inflation is forecasted to be broadly unaffected in the near-term. Core goods CPI inflation to be lower this year, bolstered by indicators w.r.t. cost and price, in the value chain. The short-term outlook for Eurozone is one of weak domestic demand as well as external demand, leading to holding down of manufacturing output. As time progresses, declining inflation, increasing incomes and enhanced supply conditions should augur well for the recovery.

The prospects of kharif crops have seen an improvement in India. The recent short-term vegetable price shocks, led by tomato prices, may lead to a rise in headline inflation. Unprecedented weather conditions, El Nino and reconditioned geopolitical tensions lead to an air of uncertainty to outlook of prices of various products.

12. Findings and conclusion

One of the findings that can be gleaned is that, the target range of federal funds rate was hiked continuously from January 2022 till May 2023. It was left unchanged in June 2023, before being hiked in July 2023. The respective discount/interest rate of Eurozone and UK registered continuous increase.

As regards Egypt, the rate had risen, but there were intermittent periods of unchanged interest rate from June to September 2022 (at 11.75%); February 2023 (at 16.75%) and May, June 2023 (at 18.75%), when compared to the immediately preceding month when monetary policy was announced. Regarding India, there was steady increase until February 2023, barring April 2022 (when it was unchanged at 4%) and June to August 2023 (when the repo rate was held constant at 6.5%). Coming to Turkey, the one-week repo rate was reduced from August 2022 till February 2023. It was held unchanged in April and May 2023 (at 8.5%). Later, it was reduced in July 2023, before getting hiked in August 2023, thereby revealing an undulating pattern of changes.

Inflation is likely to be sticky for some time. Central Banks are likely to adopt a tightening bias to anchor inflationary expectations. To sum up, the monetary policies of select countries/regions were analysed and the general impact on consumers, businesses and economy was touched upon. The issue of negative interest rates, in addition to climate-related issues and monetary policy with a prognosis on inflation and other related factors, were also expounded.

Acknowledgments

The author would like to thank Dr M Indira, Retired Professor, Deptartment of Economics, University of Mysore, Mysuru, India for her suggestions during the chapter.