ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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US Interest Rate Hike-Japan s Opportunity

US Interest Rate Hike Japan's Opportunity THE London Summit notwithstanding, the US Prime Rate has been raised further. It is now 13 percent. The Dollar has risen further vis-a-vis other currencies, especially Pound Sterling. But Sterlings problem is somewhat special in that the long-drawn miners strike has had its impact on not only Britain's overall industrial activity but also its balance of trade. So the decline in the Sterlings exchange rate will, in the short-run. exacerbate the domestic economic situation because of its immediate repercussions on import prices and thereby on prices in general. In the somewhat less short-run, however. Britain may he able to regain lost ground precisely because of the competitive advantage that the Sterling's decline confers on its exports.

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