Monetary policy preview: Front-loading rate hikes for macro stability

The current account deficit remains uncomfortably high as India's growth momentum outpaces the rest of the world.

In the run-up to the Mone­tary Policy Committee (MPC) meeting, global commodity prices have retraced to almost the pre-Ukraine conflict levels and the Consumer Price Index (CPI) trajectory in India has broadly followed the expected path. While this will provide a sense of comfort to the MPC, there are again some brewing supply-side shocks on food prices that can pose upside risks to near-term inflation prints.
 

Deficient rainfall in some parts of the country is threatening prices of rice and pulses, while excess rainfall in others is causing vegetable prices, particularly toma­toes, to move up again. The trend in food