India: Inflation above the target – ANZ

The Reserve Bank of India’s (RBI) target band of 2-6% for CPI inflation has been missed for the second month in a row, but analysts at ANZ Research see the price pressure moderating in the next months. USD/INR trades at 71.3175.

Key quotes

“For the second straight month, India’s headline CPI breached the upper bound of the RBI’s target band of 2-6%, marking 7.59%.” 

“We expect price pressures to start moderating this month as base effects turn more favourable.”

“Given the continued build-up in inflation, a rate cut in April seems unlikely. In our view, the earliest the RBI can resume cutting rates is in June.”