Forex - India Preview: due 12-Feb - January CPI to remain near recent lows


 01:00 (GMT) 08 Feb

  [Economic Data]

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India Preview: due 12-Feb - January CPI to remain near recent lows (0101-HRTC-C01)

India's January inflation print is scheduled for release after the close of markets on 12th February, and we expect CPI to remain near recent lows to come in at 2.25% y/y vs. 2.19% y/y in the preceding month. Food prices continued to weigh on headline inflation, although a lower base may help to offset some of the pressures. The rupee also remained weak against the USD in January, compared to gains in most of the other Asian currencies, which possibly lifted some of the pressure.

We expect a further recovery in headline inflation in the coming months, but it should continue to remain soft. Some inflationary impact is also seen from the populist budget announcement on Feb 1st. The central bank however delivered a surprise rate cut at the February meeting due to the persistent low inflation, and the March quarter inflation is expected to average around 2.8% y/y.


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