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20 Sep 2013
Indian central bank next: Firmer Indian Rupee awaits
FXstreet.com (Barcelona) - The Indian central bank meeting is due at 5.30GMT, with consensus among economists suggesting rates will be left unchanged at 7.25%.
On one hand, the government has been facing surging food and fuel prices - due to the INR depreciation - yet on the other hand, the economic conditions do not warrant much room to tighten any further, leave the RBI with no much room to manoeuvre.
"The RBI is unlikely to move away from its anti-inflationary stance, especially with inflation starting to climb again," says Indranil Pan, an economist at Kotak Mahindra Bank, cited by Dow Jones editor Sudeep Jain.
Another focal point at today's meeting will be whether or not the RBI decides to reduce its recent liquidity tightening measures, firt introduced as the INR crisis escalated out of control, with market demand towards the currency almost non-existent as capital outflows flew back home on specualtion that the Fed may start its tapering Sept. However, since the QE3 program has been left intact, in the short term, such event is supprtive emerging currencies, including the rupee.
On one hand, the government has been facing surging food and fuel prices - due to the INR depreciation - yet on the other hand, the economic conditions do not warrant much room to tighten any further, leave the RBI with no much room to manoeuvre.
"The RBI is unlikely to move away from its anti-inflationary stance, especially with inflation starting to climb again," says Indranil Pan, an economist at Kotak Mahindra Bank, cited by Dow Jones editor Sudeep Jain.
Another focal point at today's meeting will be whether or not the RBI decides to reduce its recent liquidity tightening measures, firt introduced as the INR crisis escalated out of control, with market demand towards the currency almost non-existent as capital outflows flew back home on specualtion that the Fed may start its tapering Sept. However, since the QE3 program has been left intact, in the short term, such event is supprtive emerging currencies, including the rupee.