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. While not its base case, Kundu also flags a non-negligible risk that the RBI could opt for a larger 50bp increase.
Rate hikes projected into early 2027
"The pickup in services inflation is particularly important from a monetary policy perspective."
"With headline inflation above the median target for a third consecutive month and underlying inflation beginning to firm, the room to look through food-led price pressures is narrowing."
"We continue to believe that the RBI will initiate a mini rate-hike cycle, announcing a 25bp hike at its October meeting, followed by two similar increases at its December and February meetings."
"Although this is not our baseline scenario, we also do not rule out a 50bp hike."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
