RBI to keep tightening risks alive – MUFG
MUFG analysts Lin Li, Michael Wan, Lloyd Chan and Khang Sek Lee highlight that Asia FX will be driven by the Reserve Bank of India’s (RBI) finely balanced decision on 7 October.
Analysts at MUFG, Lin Li, Michael Wan, Lloyd Chan, and Khang Sek Lee, emphasize that the Reserve Bank of India's (RBI) decision on October 7 will significantly influence Asia FX. While they foresee the RBI maintaining rates for now, they predict a potential hiking cycle starting in December, with a total of 50-75 basis points in tightening.
They anticipate the central bank to shift its stance away from neutrality, signaling a tightening bias. With a forecast of 50 basis points in rate hikes, they note a possible total of 75 basis points, driven by strong growth, abundant liquidity, rising credit, supportive fiscal policies, and elevated commodity prices and adverse weather conditions, which raise inflation risks.
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