CPI inflation rose to 4.8% in August from 4.5% in July and is expected to rise further, putting renewed focus on price stability
Renewed West Asia tensions have pushed up crude prices. Higher global oil prices could deepen OMC under-recoveries and add to inflation risks
The monsoon ended 13% below normal, while food inflation was close to 6% in August. Disruptions to farm output could add to price pressures
India’s economy expanded 7.8% in Q1, suggesting growth is not currently a constraint. Strong activity gives the MPC room to prioritise inflation
Markets largely expect a 25-basis-point hike. Leaving rates unchanged despite rising inflation could require substantial explanation and unsettle markets
A decade of flexible inflation targeting has improved transparency and anchored expectations. Consistent policy action can help sustain price stability over time