India: RBI to pause as target is breached – ANZ

ANZ analysts note that India’s headline CPI breached the upper limit of the Reserve Bank of India’s (RBI) target band of 2-6%, the first time since July 2016.

Key Quotes

“Although the increase was driven by higher food prices, there was a broad-based increase in prices across all major components.”

“We expect price pressures to remain elevated in January after which base effects will turn more supportive.”

“Today’s print clearly puts an impending rate cut off the table. However, we reaffirm our call for a next rate cut in June, once inflationary pressures subside.”