Perspective on CPI Data by Ms. Madhavi Arora, Chief Economist , Emkay Global Financial Services
Below the Perspective on CPI Data by Ms. Madhavi Arora, Chief Economist , Emkay Global Financial Services
“Broad-based moderation in food inflation, led by perishables and some protein goods, largely led to better-than-expected headline Feb CPI print. However, the moderation in food has been partly offset by much higher monthly momentum in core – highest in last seven months! Personal Care and Effects has been the culprit, reflecting the gold price effect, which got a double boost owing to INR depreciation.
Despite the shocker on core, the pleasant headline CPI surprise implies that the 4QFY25 inflation may undershoot RBI’s forecast by more than 40bps, and could keep the rate cut possibility in April solid – as was also reflected in the recent dovish policy minutes. However, we are keeping a tab on the fluid global dynamics and FX knock-on effect as well. So far, subdued global oil prices have tempered the knock-on effect from a weaker INR. Besides, changing global narrative on growth and tariff noises may allow EM Central banks to be more tolerant to weaker FX, letting them ease their policy stance and rates..”
Above views are of the author and not of the website kindly read disclaimer
