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ANZ analysts point out that India’s headline CPI rose to a 16-month high in October, breaching the mid-point of the Reserve Bank of India’s (RBI) target range of 4% for the first time since July 2018.

Key Quotes

“The RBI will, however, overlook today’s print which was led by a surge in food prices and focus on narrowing the output gap which we estimate widened further in Q2 FY20.”

“We thus maintain our call for a 25bp rate cut at the next policy meeting on 5 December.”