1) Sanjay Agarwal committee: centre has constituted a high-powered panel under the chairmanship of former
agriculture secretary Sanjay Agarwal to make the minimum support price (MSP) mechanism more effective and transparent
2) Yield inversion: A yield curve illustrates the interest rates on bonds of increasing maturities.
- inversion happens when the yield on a longer tenure bond becomes less than the yield for a shorter tenure bond
- A yield inversion typically portends a recession.
- An inverted yield curve shows that investors expect the future growth to fall sharply; in other words, the demand for money would be much lower than what it is today and hence the yields are also lower.
3) Soft landing: When a central bank is successful in slowing down the economy without bringing about a recession, it is called a soft-landing — that is, no one gets hurt. But when the actions of the central bank bring about a recession, it is called a hard-landing.
- A soft landing is the goal of a central bank when it seeks to raise interest rates just enough to stop an economy from overheating and experiencing high inflation, without causing a severe downturn.
- Given the massive gap between the current US inflation rate — over 9%— and the Fed’s target inflation rate — 2% — most observers expect that the Fed would have to resort to such aggressive monetary tightening that the US economy will end up having a hard-landing.
4) Reverse Currency War: A flip side of the US Fed’s action of aggressively raising interest rates is that more and more investors are rushing to invest money in the US.
- This, in turn, has made the dollar become stronger than all the other currencies.
- Every central bank is trying to figure out ways to counter the US Fed and raise interest rates themselves in order to ensure their currency doesn’t lose too much value against the dollar.
- That’s because a currency which is losing value to the dollar, on the other hand, finds that it is getting costlier to import crude oil and other commodities that are often traded in dollars.
5) Extended Fund Facility (IMF): It is an IMF lending facility to help members with balance of payments problems that need an adjustment period longer than that provided for under a standby arrangement
- The EFF was established to provide assistance to countries:
- experiencing serious payments imbalances because of structural impediments; or
- characterized by slow growth and an inherently weak balance of payments position.
- The EFF provides assistance in support of comprehensive programs that include policies of the scope and character required to correct structural imbalances over an extended period.
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