India’s Balancing Act Between Inflation, Oil and a Weak Rupee

The Reserve Bank of India has raised its benchmark repo rate by 25 basis points to 5.5%, its first hike in nearly four years, and signalled that more tightening could follow. Inflation has stayed above the RBI’s 4% target for three straight months, driven by higher oil prices from the Iran war and a weak monsoon, while the rupee hovers near record lows. Yet the economy grew 7.8% in the April to June quarter, and India is on track to overtake Japan as the world’s fourth-largest economy. Lavanya Venkateswaran, Senior ASEAN and India Economist at OCBC Bank, discusses how far the RBI will go, the risks from energy prices and stalled US-India trade talks, and whether India can sustain its growth momentum. Image Credit: Shutterstock See omnystudio.com/listener for privacy information.