India also needs to keep rates high enough to attract foreign capital and offset the current account deficit, in order to keep the rupee from weakening and making inflation worse.

WSJ: India Central Bank Cuts Lending Rate

India also needs to keep rates high enough to attract foreign capital and offset the current-account deficit, in order to keep the rupee from weakening and making inflation worse.

WSJ: India Central Bank Cuts Lending Rate

In economics it is axiomatic that positive and negative current account balances will ultimately be offset by changes in relative currency valuations.

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Meanwhile, huge current-account surpluses cannot be expected to offset capital outflows for ever.

ECONOMIST: Money in, money out

Any savings consumers achieve by picking a lower cost plan should roll into a health savings account that they can use to offset out-of-pocket medical expenses.

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Since savings equals investment, any increase in the U.S. savings rate relative to investments will be offset by lower capital inflows and a dollar for dollar improvement in the trade account.

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