India: Softer CPI keeps RBI on hold – MUFG

MUFG’s Senior Currency Analyst Lloyd Chan notes that India’s CPI inflation under the rebased 2024 series rose to 2.8% year-on-year, driven mainly by food prices. He highlights that this places inflation back within the Reserve Bank of India’s 2%-6% target band, which should allow policymakers to keep rates unchanged at the April policy meeting.

Inflation back inside RBI target band

"In India, CPI inflation rose to 2.8%yoy under the rebased series (with 2024 as the base year), driven primarily by food inflation."

"This brings inflation back within the RBI’s 2%-6% target range and should allow the central bank to remain on hold at its next policy meeting in April."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)