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India’s Reserve Bank still has much to do

India raised its two policy interest rates by 25bp earlier today, which was in line with the consensus view but was less than our forecast of a 50bp hike. Nevertheless, we continue to believe that the Reserve Bank (RBI) is moving too slowly. Rates will probably move up again before the next scheduled RBI monetary policy meeting in late July: our best guess is at some point in early June.

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