India GDP Preview: Q3FY25 Growth - A Tepid Rebound

February 26, 2025 4:50 AM UTC

India's GDP saw a slight recovery in the last quarter of 2024, growing at 6.3% due to increased government spending. This rebound, however, still falls short of previous highs, reflecting the economy's reliance on state intervention amid weak private sector and consumer activity. Despite fiscal effo

Rate Cuts on the Horizon: RBI Signals Confidence in Inflation Outlook

February 24, 2025 1:50 AM UTC

The Reserve Bank of India (RBI) is tilting toward additional interest rate cuts to stimulate economic growth, rather than exclusively focusing on controlling inflation. The Monetary Policy Committee (MPC) lowered the benchmark repo rate by 25 basis points to 6.25%, citing headline inflation convergi

Monetary Policy Reset: RBI’s Balancing Act Begins

February 7, 2025 4:57 PM UTC

The RBI has cut the repo rate by 25 basis points to 6.25%, marking its first reduction in five years. While aimed at supporting growth, the central bank maintains a neutral stance, signaling caution amid global uncertainties. Inflation is projected to ease, but risks from trade disruptions and finan

RBI Monetary Policy Preview: MPC to Deliver a Rate Cut

February 6, 2025 7:50 AM UTC

With the RBI’s policy review around the corner, all eyes are on how the central bank will tackle India’s slowing growth momentum and the increased currency volatility. The RBI is likely to cut rate by 25bps to 6.25% on February 8. Imported inflation will remain a key concern. 

India Budget Preview: Balancing Growth and Fiscal Prudence: What to Expect from Budget 2025

January 31, 2025 2:28 PM UTC

The FY26 Budget comes at a crucial time for India’s economy, requiring a delicate balance between fiscal prudence and economic stimulus. As GDP growth moderates, inflation continues to impact disposable incomes, and global uncertainties persist, the government is expected to focus on targeted meas

Monetary Policy Watch: Will RBI Infuse Liquidity or Cut Rates?

January 27, 2025 7:27 AM UTC

With the RBI’s policy review around the corner, all eyes are on how the central bank will tackle India’s growing liquidity crunch. Despite calls for rate cuts, the banking system's liquidity shortfall—hitting INR 3.3 trillion—poses a bigger challenge, keeping lending rates high and slowing c

The Growth-Inflation Tug of War: RBI’s 2025 Policy Outlook with a New Governor

January 9, 2025 8:14 AM UTC

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) is currently navigating a complex economic landscape marked by rising inflation and sluggish growth. The recent appointment of Sanjay Malhotra as the new RBI Governor adds another layer of intrigue to the central bank's policy directi

EM Government Debt: BRICS Divergence

January 2, 2025 8:05 AM UTC

   Brazil and South Africa suffer from debt servicing costs outstripping nominal GDP, which will remain a concern unless a consistent primary budget surplus is seen – though S Africa enjoys a much longer than average term to maturity than Brazil.  India and Indonesia, in contrast, enjoy nominal

EMFX Outlook: Hit From Tariffs, Before Divergence

December 20, 2024 10:00 AM UTC

·        EM currencies on a spot basis will remain on the defensive in H1 2025, as we see the U.S. threatening and then introducing tariffs on China imports – 30% against the current average of 20%. China’s response will likely include a Yuan (CNY) depreciation to the 7.65 area on USD/CN

RBI Decision Review: RBI Balances Inflation and Growth with Neutral Policy

December 7, 2024 2:25 PM UTC

The RBI kept the repo rate unchanged at 6.5% but unexpectedly cut the CRR by 50 basis points to inject ₹1.16 lakh crore into the banking system. Growth forecasts for FY2025 were revised down to 6.6%, while inflation expectations rose to 4.8%. This cautious approach reflects the central bank’s fo

RBI Decision Preview: Growth Slackens, Inflation Soars: RBI’s Policy Tightrope

December 3, 2024 6:42 AM UTC

The Reserve Bank of India (RBI) is gearing up to announce its last monetary policy decision for 2024 on December 6. For the upcoming meeting, we anticipate that the RBI will likely keep the repo rate unchanged at 6.5%, given the recent uptick in inflation. The decision to hold rate will come despite

India GDP Review: Rural Strength vs Manufacturing Weakness - Q2 Story

November 29, 2024 3:05 PM UTC

India’s Q2 GDP slowed to 5.4%, driven by weaker manufacturing and global headwinds, but rural demand and agriculture showed resilience. Public investment and festive consumption are expected to support recovery in H2, though challenges like export contraction and fiscal constraints remain.

India GDP Review: India’s GDP Faces Headwinds in Q2 FY25

November 26, 2024 9:45 AM UTC

India’s GDP growth is projected to slow to 6.6% in Q2 FY25, marking the weakest pace in six quarters. This decline is primarily due to slower growth in manufacturing and services, though agriculture has shown resilience. Despite robust government spending and rural demand, weak private consumption

Hawks or Doves? Decoding the New RBI MPC's Monetary Policy Shift

November 4, 2024 7:18 AM UTC

The Reserve Bank of India's Monetary Policy Committee (MPC) recently maintained the repo rate at 6.50% while shifting its stance from "withdrawal of accommodation" to "neutral," reflecting a cautious approach towards economic growth and inflation management. The meeting, which included three new e

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.