India Economics Update MPC minutes suggest more frontloading is in store The minutes of the MPC’s June meeting – in which the repo rate was hiked by 50bps to 4.90% – show that combatting inflation remains the priority and suggest that tightening will continue to be... 22nd June 2022 · 2 mins read
India Chart Pack FX intervention from a position of strength The rupee has held up better than most EM currencies this month and the recent drop in FX reserves strongly indicates that this is in part because the RBI has once again ramped up its FX interventions... 22nd June 2022 · 9 mins read
India Economics Weekly Market turmoil tests RBI’s appetite for FX intervention Although the rupee fell to a record low against the US dollar this week amid a broad-based sell-off in global financial markets, it held up better than most other EM currencies. That’s probably down... 17th June 2022 · 3 mins read
India Economics Update Wider trade deficit to persist India’s goods trade deficit didn’t widen in the immediate aftermath of Russia’s invasion of Ukraine – rather counter-intuitively for a major commodity importer. But that has now started to happen, and... 16th June 2022 · 4 mins read
India Data Response Wholesale Prices (May) Indian wholesale price inflation climbed to another historic high in May. The rise in food prices in particular suggests that some of the upside risks to the inflation picture we have been flagging... 14th June 2022 · 2 mins read
India Data Response Consumer Prices (May) India’s consumer price inflation dropped back in May, but much of that was due to base effects. We expect inflation to resume rising from June, prompting the RBI to continue frontloading policy... 13th June 2022 · 3 mins read
India Economics Weekly Food inflation, new MSPs, RBI policy The Reserve Bank stepped up the pace of tightening by hiking the repo rate by 50bps to 4.90% this week. It also upped its inflation forecasts substantially, primarily due to food inflation. We agree... 10th June 2022 · 5 mins read
India Economics Update RBI tightening cycle has further to run The RBI hiked the repo rate by 50bps to 4.90% today, as we had anticipated, and made substantial upward revisions to its near-term inflation forecasts. Further tightening will follow over the coming... 8th June 2022 · 3 mins read
India Economics Update Drop in inflation in May will prove fleeting Headline CPI inflation in India is likely to have dropped in May, primarily due to base effects. But beyond May, we expect inflation to resume rising, reaching over 8% by August. The RBI is likely to... 7th June 2022 · 3 mins read
India Economics Weekly Resilient economy reinforces case for frontloading GDP data for Q1 released this week showed that the economy weathered the Omicron wave pretty well, and the timelier data suggest a solid performance so far in Q2. That said, there were also further... 3rd June 2022 · 4 mins read
RBI Watch MPC to frontload monetary tightening We think the MPC will follow its off-cycle rate hike last month with a 50bp hike to the repo rate (to 4.90%) at the conclusion of its upcoming meeting on Wednesday 8 th June. Beyond next week, the... 2nd June 2022 · 7 mins read
India Economics Focus Policymakers will turn to financial repression Policy tightening by the RBI is putting public finances stretched by the pandemic under further strain. While an increase in debt financing costs is inevitable, we expect the government and RBI to... 1st June 2022 · 10 mins read
India Data Response Manufacturing PMI (May) India’s manufacturing PMI held steady in May, but there are further signs of price pressures becoming more intense last month. That supports our view that the RBI will frontload its policy tightening. 1st June 2022 · 2 mins read
India Data Response GDP (Q1) Indian GDP data for Q1 (Q4 of FY21/22) show that activity held up much better during the Omicron outbreak than during previous virus waves. The economy is well-placed for strong growth over 2022 as a... 31st May 2022 · 2 mins read
India Economics Weekly RBI spoiler alert, sugar export ban Comments from RBI Governor Das this week provided more support for our view that the RBI will frontload its monetary policy tightening with a 50bp hike in June, and that the Reserve Bank will continue... 27th May 2022 · 6 mins read
India Chart Pack Shifting policy mix The RBI kicked off its tightening cycle this month with a 40bp hike to the repo rate (to 4.40%) in an unscheduled policy announcement. The minutes to that meeting show that several MPC members are... 27th May 2022 · 9 mins read
