Total spending went up 0.6% m/m. Overall, total consumer spending increased 1.9% in 3-month average terms and 6.5% over the past 12 months.
Report
August 11, 2015
India Monetary Policy Review – August 2015
The Reserve Bank of India (RBI) maintained the Repo rate 7.25%, as expected and the Government and the RBI are broadly in agreement regarding the future composition of the Monetary policy committee. The outlook for the remainder of the monsoon - and it impact on food prices, as well as the impact of the Fed’s anticipated rate rise are two critical determinants of future interest rate movements.
Summary and Overview:
- The RBI maintained the Repo rate 7.25%, as expected.
- The Government and the RBI are broadly in agreement regarding the future composition of the Monetary policy committee.
- Inflation, both headline and core, accelerated in June. Headline pressures are expected to abate during July and August due to favourable ‘base effects’.
- The RBI will closely observe movements in core inflation as to whether the increase is temporary or not.
- The Government and the RBI are working on adopt a medium term framework for Foreign Portfolio investment in Indian debt securities.
- NAB Economics is forecasting the Repo rate to remain on hold at 7.25%, with an easing bias.
- The outlook for the remainder of the monsoon – and it impact on food prices, as well as the impact of the Fed’s anticipated rate rise are two critical determinants of future interest rate movements.
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