Indian Rupee: RBI seen delaying rate hikes – MUFG
Michael Wan at MUFG reports that India’s July Consumer Price Index (CPI) rose to 4.45% year-on-year, slightly below consensus but above June’s 4.38%, driven mainly by higher food prices.
India's July Consumer Price Index (CPI) rose to 4.45% year-on-year, marginally below consensus estimates of 4.5% but accelerating from 4.38% in June. This increase was mainly driven by higher food prices, with consumer food inflation reaching 5.52% year-on-year. While headline inflation remained above the RBI's maintenance level of 4.0% for two consecutive months, it is still comfortably within the central bank's target inflation band of 2-6%.
The Indian Rupee's RBI is expected to maintain a neutral stance for now, delaying a projected 50 basis points hiking cycle until December 2026. This is based on the fact that inflation remains within the RBI's 2-6% band and the central bank's stance of waiting for further data.
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