Holding the Line: RBI Maintains Policy Rate Amid Economic Optimism

October 9, 2024 1:56 PM UTC

The Reserve Bank of India (RBI) has decided to maintain the policy repo rate at 6.50% and has shifted its stance to 'neutral' to balance the objectives of inflation management and economic growth. Although inflation has eased, the RBI remains cautious due to rising geopolitical tensions and increase

RBI’s October Rate Call: Patience May Prevail Over Pressure

September 30, 2024 6:58 AM UTC

The RBI is expected to keep interest rates unchanged in its October meeting, despite global central banks initiating rate cuts. Domestic inflation concerns and uncertainties over MPC appointments are likely to drive a cautious "wait-and-watch" approach, with potential easing only by December. 

EM FX Outlook: Fed Easing Helps but Divergent Trends

September 26, 2024 8:00 AM UTC

  USD strength is ebbing across the board, which provides a positive force for most EM currencies on a spot basis.  However, where inflation differentials are large, the downward pressure will remain in 2025 e.g. Turkish Lira (TRY).  Where inflation differentials are modest against the U.S., but

India GDP Review: A Sobering Start to FY25

September 1, 2024 1:53 PM UTC

India’s GDP growth slowed to 6.7% yr/yr in Q1 FY25, falling short of expectations, as reduced public spending during the election period weighed on economic activity. Strong private consumption and investment provided some support, but a decline in manufacturing growth and weak external trade damp

India GDP Preview: Slowing Growth, Solid Prospects

August 26, 2024 6:04 AM UTC

India’s Q1 FY25 (Apr-Jun) GDP is expected to moderateto 7% yr/yr. The slowdown is expected on the back of limited government spending and sluggish urban demand. Additionally, high interest rates and inflation are expected to have been a drag on growth. 

EM Markets Divergence with China Harder Landing Concerns

August 14, 2024 3:35 PM UTC

Global market turbulence has had a spillover impact into EM, but also some EM assets have benefitted from rotation away from the U.S.  What are the prospects in the coming months?
We see scope for a 2nd wave of U.S. equity and Japanese Yen (JPY) correction, which are a mixed influence for EM assets

Despite Favourable Metrics RBI Committed to Tightening

August 11, 2024 5:03 PM UTC

The RBI will retained its stance of withdrawal of accomodation and maintained benchmark rate of 6.5% in its August meeting, staying on the path of inflation target. Concerns around high food inflation and geopolitical instability ensured that the RBI remained committed to its monetary tightening sta

Monsoon Boost or Policy Shift? RBI Faces Critical Decision

August 5, 2024 6:34 AM UTC

The calls for a rate cut are rising in the Indian market, but this is unlikely to impact the RBI's upcoming decision. The RBI will retain its stance of withdrawal of accomodation and maintain benchmark rate of 6.5% in its August meeting, staying on the path of inflation target. Concerns around high

EM After the Elections: Fiscal Focus and Inflation Questions

July 1, 2024 8:05 AM UTC

Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil.  India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip

Gold Rush: RBI Bolsters Reserves Amid Global Uncertainty

June 27, 2024 7:05 AM UTC

Despite a slight decline from its peak, India's reserves remain robust at US$ 652.8bn as of June 14. The RBI has followed a proactive approach in managing and diversifying these reserves, which now provide the central bank with sufficient room to stabilise the rupee amid recent volatility. It would

Split Perspectives: RBI MPC's Take on Growth and Inflation

June 26, 2024 5:23 PM UTC

The latest minutes from the RBI MPC meeting indicated that members are optimistic about India's economic growth outlook but are exercising caution due to inflation concerns. The minutes underscored differing viewpoints between external and internal MPC members regarding future policy actions. While

EMFX Outlook: USD Strength to Ebb with Different EM Impact

June 25, 2024 8:05 AM UTC

 We see Fed rate cuts from September starting to soften USD strength into year end and 2025.  Beneficiaries will include currencies with inflation moving towards target and high real rates or, alternatively, undervalued currencies. This should benefit the Brazilian Real (BRL) and Indonesian Rupiah

RBI’s Balanced Act: Steady Rates and a Promising FY25 Outlook

June 10, 2024 9:24 AM UTC

The Reserve Bank of India's Monetary Policy Committee, led by Governor Shaktikanta Das, chose to keep the repo rate unchanged at 6.5% for the seventh consecutive time, aiming to  ensure that the disinflationary process sustained. Growth is expected to be robust in FY25, while inflation risks are el

India Inflation Review: Sticky Prices to Keep RBI Cautious

May 14, 2024 3:54 AM UTC

India’s consumer price inflation eased amrginally to 4.83% yr/yr in April, reflecting lower fuel and light prices. The government cut prices of LPG cylinders in India ahead of the elections. However, food price pressures persist despite various supply side measures, underscoring the sticky nature

EMFX: Diverging On Domestic Forces Not Less Fed Easing Hopes

May 3, 2024 10:45 AM UTC

While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African

Growth Gains But Inflation Pains: RBI's view on Indian Economy

April 29, 2024 12:42 PM UTC

Minutes of the latest Reserve Bank of India (RBI)'s monetary policy committee meeting revealed a nuanced outlook blending optimism regarding India's growth trajectory with apprehensions surrounding inflationary risks. While upbeat macroeconomic indicators paint a favourable picture, the committee re

RBI Holds Rates Firm, Citing Room for Economic Growth

April 11, 2024 5:44 AM UTC

In line with our expectations, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) chose to maintain the policy repo rate at 6.5% in its latest meeting. The decision reflects their aim to gradually scale back stimulus measures while still supporting economic growth. It also unders

RBI to stand pat in April

April 4, 2024 7:25 AM UTC

The Reserve Bank of India (RBI) is gearing up to announce its first monetary policy decision for FY25 (April-March) on April 5. For the upcoming meeting, we anticipate that the RBI will likely keep the repo rate unchanged at 6.5%, given the optimistic outlook for economic growth and still elevated i

EM FX Outlook: Domestic Drivers Key

March 26, 2024 9:01 AM UTC

   In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries.  Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)

RBI Minutes Reveal a Cautious Committee

February 23, 2024 10:42 AM UTC

The Reserve Bank of India's (RBI) latest monetary policy decision, as reflected in the minutes of the February Monetary Policy Committee (MPC) meeting, presents a nuanced landscape of optimism about India's growth prospects, juxtaposed with concerns over inflation risks. The views of various MPC mem

EMFX: Carry and Domestic Fundamentals Rather Than the USD

February 22, 2024 10:00 AM UTC

Bottom Line: Most major EMFX currencies have performed better than the Euro or the Japanese Yen against the USD in 2024 (Figure 1).  This is due to carry trades in Latam, but elsewhere reflects global equity love on Indian equities or domestic fundamentals.  This resilience for Brazilian Real/Indi

Reserve Bank of India Review: No Rate Cut On The Horizon

February 12, 2024 6:25 AM UTC

The Reserve Bank of India's Monetary Policy Committee, led by Governor Shaktikanta Das, chose to keep the repo rate unchanged at 6.5% for the sixth consecutive time, aiming to support ongoing economic recovery while ensuring a sustained decline in inflation. Despite signs of inflation moderation and

Reserve Bank of India Preview: No Rate Cut In Near Term

January 31, 2024 11:11 PM UTC

The RBI will keep the repo rate unchanged at 6.5% during the upcoming monetary policy committee meeting on February 8th. The current tight stance is expected to persist until at least mid-2024, as the central bank foresees inflation averaging 5.4% year-on-year in FY24, ending on March 31, 2024, befo

India's Robust Q2 FY24 Economic Growth Defies Global Challenges

December 1, 2023 12:04 PM UTC

In the face of global headwinds, inflationary pressures, and a high-interest-rate environment, India has showcased its economic resilience with a stellar 7.6% y/y growth in the second quarter (Jul-Sep) of FY24. This growth figure, released by the National Statistical Office, surpassed market expecta

India Q2GDP Review: Indian Economic Engine Resilient in the Face of Headwinds

September 1, 2023 2:15 PM UTC

India’s latest Q2 2023 (Q1 FY24) GDP growth of 7.8% y/y underscores the country’s economic resilience in the face of significant macro headwinds. The economy continues to record steady growth despite tighter global liquidity conditions, weakening global trade and adverse weather related events.

India FY 2024 Budget Preview: Walking a Tight-rope

January 31, 2023 2:49 PM UTC

The global financial tightening and slowdown has again necessitated a tilt towards measures aimed at sustaining economic growth momentum. With FY2024 being the only full budget ahead of the next parliamentary elections scheduled in May 2024, a populist budget geared towards supporting rural demand i