India's central bank keeps benchmark rates steady, cites 'moderate' core inflation
📰 source: cnbc_topnews · 💼 business
india's central bank kept its benchmark rate at 5.25% for a fifth straight meeting on wednesday, even as retail inflation rose above the rbi's 4% medium-term target. governor sanjay malhotra said core inflation — excluding food and energy — remains moderate and is expected to decline after peaking in the december quarter. he stressed the need for clarity on inflation's path before any policy action, with future moves tied to growth-inflation dynamics.
the nifty 50 traded flat while 10-year bond yields fell about 4 basis points to 6.782%. retail inflation hit an 18-month high of 4.38% in june, driven by fuel and food costs, but core inflation was just 3.7% at end-april. hsbc expects inflation to stay above 5% for eight months starting october and predicts rate hikes of 25bp each in october and december.
risks remain elevated: india imports nearly 85% of its fuel, making it vulnerable to middle east supply disruptions, and a deficient monsoon threatens food prices. the rupee is among asia's worst performers, with standard chartered forecasting 96 per dollar by 2026. malhotra called the growth outlook 'hazy' due to monsoon, el nino, geopolitics, and global trade policy.
why it matters: india's steady rates mask inflation risk; hsbc sees hikes in october and december if food and energy costs persist.
source: cnbc_topnews
sentiment: +0.00 · impact: 0.60