ISLAMABAD – Real interest rates in South Asia are among the highest in theworld, raising the prospect of more dovish monetary policy in the region,Bloomberg has reported.
Sri Lanka, Pakistan and India rank in the top five of the world’s majoreconomies with the highest inflation-adjusted interest rates.
While negative real rates might be considered a sign of financialinstability, a high inflation-adjusted benchmark interest rate is, onbalance, a reason for central bankers to consider a looser policy stance.[image: 2o3f49k8]
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Indian Finance Minister has already complained about high real rates, andeconomists are starting to price in the possibility of a rate cut as earlyas next month.
