Asian Stocks Mixed as Korean Chipmakers Rally 
Gold Prices Rise as Yen Rally Weakens Dollar 
Japanese Yen Nears Seven-Month High as Oil Approaches $100 
China Inflation Accelerates in August as CPI, PPI Rise 
South Korea GDP Surges on Chip and AI Boom 
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ECB Rate Hike in Focus as Oil Tops $100 
Iraq Seeks 6 Million Bpd OPEC+ Oil Quota 
Asian Currencies Steady as Yen Holds Firm, Oil Tops $100 
China Exports Surge 25% in August as Trade Surplus Hits $119 Billion 
Iran Threatens Gulf Energy Assets as U.S. Tensions Escalate 
China Boosts Gold Reserves by 650,000 Ounces as Prices Rally 
Brent Oil Tops $100 as Middle East Conflict Threatens Supply 
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India’s Central Bank Interest Rate Cut Anticipated
India's central bank, the Reserve Bank of India (RBI), is poised to cut its key policy rate by 25 basis points to 6.25% in December, according to a recent Reuters poll of economists. This decision aims to address the slowing economic growth amid fluctuating inflation rates.
Current Economic Context
In September, inflation unexpectedly rose to 5.49%, but it is forecasted to average 4.9% this quarter, potentially dropping to 4.6% by early 2024. This decline in inflation offers the RBI room to ease its monetary policy, especially since the bank has maintained interest rates at their highest level since early 2019 over the past ten meetings.
Majority Opinion on Rate Cut
In an Oct. 21-29 Reuters poll of 57 economists, 30 anticipate the RBI will lower the repo rate at its meeting from December 4-6. The remaining 27 economists predict no change. Miguel Chanco from Pantheon suggests that manageable inflation will support this decision, noting that upcoming GDP reports could influence the committee’s outlook.
Future Projections and Considerations
While India is projected to remain the fastest-growing major economy, growth is expected to taper to 6.9% this fiscal year and 6.7% next year, down from 8.2% in 2023/24. Analysts indicate that, despite the growth rate, inflation is likely to remain above the RBI's 4% target until early 2026, limiting the scope for further rate cuts.
Conclusion
Overall, while the likelihood of a December rate cut is increasing, experts believe the RBI will proceed cautiously, waiting for clearer signs that inflation dynamics are stable.
