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Experts expect some inflation, CAD relief after US Fed hikes rates

MPC will be guided more by domestic inflation-growth dynamics than US central bank measures, they say

Photo: Bloomberg
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The MPC, which is scheduled to meet next week, is likely to be guided more by the domestic inflation-growth dynamics than the US Fed’s move.| Photo: Bloomberg

Indivjal Dhasmana New Delhi
India may get some relief on the retail price inflation and current account deficit (CAD) fronts in the current financial year following the US Federal Reserve’s move to hike its key benchmark interest rate by 75 basis points (bps).

“If aggressive US Fed tightening brings down commodity prices, it may transmit to lowering domestic inflation within the MPC’s (monetary policy committee’s) comfort zone,” ICRA Chief Economist Aditi Nayar said.

Retail inflation remained above the Reserve Bank of India’s target of 4 per cent, plus or minus 2 per cent, for the sixth consecutive month in June, though it moderated to

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First Published: Jul 28 2022 | 1:18 PM IST

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