Reserve Bank of India set to raise rates for first time in four years

Vivek Rajpal: Vivek Rajpal is Asia macro strategist at JB Drax Honore. In this news, he comments on market reactions to a potential rate hold by the RBI, warning of pressure on the rupee and bond markets while noting the need for higher rates to attract capital. Rahul Bajoria: Rahul Bajoria serves as India and ASEAN economist at BofA Global Research. In this news, he provides analysis on the RBI's likely decision to begin a tightening cycle starting this week, citing resilient growth and rising inflation risks. Reserve Bank of India: The Reserve Bank of India is the central bank responsible for formulating and implementing India's monetary policy, including setting the benchmark repo rate. In this news, it is positioned to potentially deliver its first rate hike in nearly four years at the upcoming policy meeting amid broadening inflation pressures. Inflation Dynamics: Inflationary pressures in India have broadened beyond food and fuel, with prices across nearly half of the CPI basket rising at or above target. Market Expectations: Swap markets are pricing in further rate increases by the RBI over the coming months amid concerns about falling behind global peers. Monetary Policy Shift: Major central banks including the US Federal Reserve and Bank of Japan have raised rates since the US-Israeli war on Iran began seven months ago.