Rising global uncertainty

India needs active policy intervention

The global economic outlook significantly worsened over the last week with no clear sign of reversal. The US designated China as a currency manipulator after the Chinese yuan depreciated past seven to the US dollar. The underlying reasoning is that China is manipulating its currency to help exporters. Earlier, as the possibility of a trade truce faded, along with the emergence of reports that Chinese firms have been asked to not import agricultural products from the US, President Donald Trump announced tariffs on an additional $300 billion worth of imports. The rise in trade tension resulted in a wider sell-off