RBI is cautious as long-term inflation expectations of market participants remain elevated with 5Y and 10Y ahead average inflation tracking 4.9% and 4.5% respectively
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Oct 09, 2023
QuantEco Research || Why is the RBI pushing back on rate cut expectations?
The RBI is cautious with elevated long-term inflation expectations of market participants despite accelerated monetary tightening since Apr-22. Emphasis on the 4% inflation target and liquidity calibration have been chosen as means to dissuade pre-mature monetary easing expectations. Hopefully, this will help anchor expectations.