Lincoln: inflation to ease in the Far East

The consensus among financial commentators is that China and India are currently seeing a challenging investment environment because of their link to the US dollar. Where these markets are linked to US monetary policy, their interest rates are artificially low. This loose monetary policy promotes money supply growth which fuels excess demand and has thus pushed up inflation. However, Fiona Barwick, director of regional research at Mondrian, outlined how the fact that the US dollar is already undervalued against the Euro and other major currencies means it is unlikely to fall significantl...