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Citi Shift Back Rate Cut Call on Hawkish RBI Hold

INDIA CENTRAL BANK
  • Following the hawkish hold for the Reserve Bank of India overnight, Citi Economics change their RBI call, and now see a longer hold for policy until a first cut in October. This has been pushed back from August previously. They see fiscal consolidation and bond inclusion-related inflows seeing bond yields head lower.
  • Overnight, RBI held policy at 6.50% for the repo rate, retaining hawkish language despite some speculation, including in our own preview, that the withdrawal of accommodation could be shifted back to neutral at this meeting.

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