11% and counting

The headline inflation number came in at 11%. This is just the projected number when the actual numbers come in - I full expect it to be above 12%.

Taylor rule says that for every 1% increase in the inflation rate the nominal interest rate should go up by more than 1%. Which means that the RBI is going crank up the rates like no tomorrow. I fully expect the rates to go up to 13-14%. Which would mean that the Rupee should rise relative to the US$.

Now is the time to go into Cash. Take $ debts and wipe out all Rupee debts.