For example, suppose a family took out a 30-year mortgage in 2012, under the expectation that the FOMC would deliver on its commitment to keep inflation at 2 percent. Because inflation has been so low over the past two years, the borrower’s current repayments are now surprisingly expensive in real terms.
In fact the current account deficit for the current fiscal year is expected to contract by nearly Rs 6.0 billion. The deficit is projected to be reduced to more than half the size of the deficit in the preceding year.