Monetary Policy in Different Countries (India, UK, China)

To understand monetary policy in differing countries we need to have some motivating questions.

Why are interest rates on credit cards so high in India?

Money supply is controlled in India via 3 rates: bank rate, repo rate and reverse repo rate. Bank rate (currently, Sep09, is around 6%). This is the rate RBI will lend to other banks. In Oct 1991, it was 12%, 1981 it was 10%.

Why in Britain is inflation exceeding interest rates for the first time since 1981?

Edmund Conway, economics editor on the Telegraph, reported that in August 2008, Uk inflation exceeded interest rates for the first time since 1981 (27 years). This meant Britain had negative real interest rates (suggesting the Monetary Policy Committee should raise the cost of borrowing).