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More growth-stabilising measures are likely to be implemented in India, according to economists at Standard Chartered Bank. USD/INR is trading at 76.2035.

Key quotes

“We believe further fiscal support is needed to stabilise India’s economy, despite constrained fiscal space. We expect GDP growth to slow to a three-decade low of 2.7% for FY21.”

“We estimate that the combined (central plus state) fiscal deficit target will be 9.8% of GDP in FY21, versus the budgeted 6.4% of GDP.”

“The RBI is likely to finance fiscal deficit slippage by conducting more open market operations (OMOs), the purchase of Indian Government Bonds (IGBs) in the secondary market.”