: New Delhi, March 12, 2011
The devastating 8.9 magnitude earthquake that rocked Japan overnight has shaken the global markets and trade in a equally huge scale. However surprisingly it seems, it has come as good news for some section of business and markets! As soon as the news broke out, the Dollar and Yen values rose only for a while and then it came down again. In spite of the heavy economic losses in Japan, the Dollar and Yen prices fell in the global market with stock brokers and investors hoping that Japanese investors would be taking back overseas holdings and insurance companies would be buying yen to pay out Japanese company insurance policies. In fact experts and strategists are already found betting that Japanese investors would surely be withdrawing funds, based on past experiences. This is of course due to the reason that Japan has a unique international investment position and has funds in surplus to withdraw.
On the other hand in India, with a history of proven examples of the past where the capitalists of the country took undue advantage of any world situation or crisis to reap high profits by creating artificial crisis, it is time again to face the same risk of increased inflation. Although food inflation has marginally come down last month and global oil process have fell as well, things and prices have not changed for the average Indian.. With the ongoing crisis in Middle East and North African (MENA) region and high impact of the Euro zone peripheral debt, the country is already at a risk of inflation to hit high and the coming few days is set to be a test of Indian’s business and capitalistic character. Although the Finance Minister Pranab Mukherjee has indicated on 6th March that the Finance Ministry’s mid-quarterly review of the monetary policy scheduled on March 17 would issue directions to RBI to focus more on containing inflation, the good hope is only that it does not turn out too late.