Low inflation buys the RBI time, but FX concerns grow
A limited inflationary impact from the surge in energy prices so far should enable the Reserve Bank of India (RBI) to keep the repo rate on hold at 5.25% at the conclusion of the MPC meeting on Wednesday 8th April. But the pressure to tighten policy over the coming weeks and months will build if the Middle East conflict intensifies and in particular if the rupee comes under further downward pressure.
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