India’s macro picture continues to evolve at speed. The RBI is holding steady for now, but the rupee has come under renewed pressure and liquidity tools are being deployed more aggressively. Exporters are crying foul, foreign card use is facing tighter scrutiny and fintech enforcement is entering controversial new territory. Beneath the headlines, the system still looks stable - but only because the foot is hovering over the brake while we still have our foot on the gas.
Monetary Policy & Liquidity
Rates. No move in August - the RBI left the repo rate unchanged at 5.50%. But it struck a distinctly “watchful” tone. Rate cuts haven’t been ruled out, just deferred. The inflation forecast has crept up slightly (2.07% in August, up from 1.61% in July), driven by food and transport. Having said that….. anticipate seeing some room for 25 to 50bps of further easing before year end - especially if external pressures ease.
Backlink: [April 2025 brief] where we called the start of this year’s...
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