The USA Federal Reserve will keep the interest rate unchanged until the economy comes on track. Yesterday the US-Fed announced that it would not change the Interest rates and vowed that it would keep the rates between 0 – 0.25% until the economy comes back on track. It’s a big decision. We also know that last month the US had announced an economic relief package of about $2.2 trillion.
If the rates remain unchanged for a long time, it would mean that a lot of money to flow in developing countries. Indian economy is expected to do better compared to other developing countries, in spite of Covid’s impact, due to the large domestic market and expectation of global companies increasing their sourcing from India. Therefore, we can expect global liquidity flows to India to increase in coming months benefiting the Indian financial markets.