Having not risen for the best part of four years, pump prices in India have now been hiked four times in the past two weeks, with both petrol and diesel prices now around 8% higher than they were at the start of May. We think that could be just under half of the total pump price rise if global oil prices stay around current levels. That will feed directly into headline inflation. Next week, we think the RBI will hike the repo rate by 25bps, to 5.50%. But a larger hike cannot be ruled out if the rupee comes under renewed pressure.
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