Indian Rupee: RBI seen starting mini hiking cycle - Societe Generale
Societe Generale’s Kunal Kundu expects the Reserve Bank of India (RBI) to respond to India’s broadening inflation pressures with a new mini rate-hike cycle. Kundu projects a 25bp hike in October, followed by two similar moves in December and February.
Indian Rupee could see a mini hiking cycle from the Reserve Bank of India (RBI), according to Societe Generale’s Kunal Kundu. The economist anticipates a 25 basis point (bp) rate hike in October, followed by two additional hikes in December and February. Although this scenario is not the base case for Kundu, he also warns of a significant risk: the RBI could opt for a larger 50bp increase.
The pickup in services inflation is a crucial factor for monetary policy, as headline inflation has been above the median target for three consecutive months, with underlying inflation starting to pick up. The room to overlook food-led price pressures is diminishing. Despite this being an alternate scenario, Kundu does not dismiss the possibility of a 50bp hike.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.