India's August consumer price index, released by the government on the 14th, rose 4.82% year-on-year, the highest since the calculation method was changed in January. It slightly exceeded the 4.80% rise forecast by economists in a Reuters poll and accelerated from the previous month's 4.45% gain. Price pressures spread beyond food and transport, strengthening expectations that the Reserve Bank of India will raise rates as early as next month. The central bank last month left the repurchase rate, its key policy rate, unchanged at 5.25%, but according to the minutes of its previous monetary policy meeting, some central bank officials, including Governor Malhotra, indicated they would support a rate hike if inflation broadened across sectors. Aditi Nayar, chief economist at ratings agency ICRA, said that under the base scenario, if there is evidence of a broad-based build-up in inflationary pressures and crude oil prices remain elevated, a rate hike at the December meeting is possible. The previous rate increase was in February 2023. According to Sakshi Gupta, principal economist at HDFC Bank, core inflation, which excludes volatile food and fuel, stood at 4.2%, up from 3.86% in July.
HDFC Bank Limited ADRAugust CPI accelerated to 4.82%, strengthening expectations the RBI will hike rates next month, pushing the 10Y bond yield up (price down).
