Trump's policies could pose challenge to timing of RBI's rate cut: Report
Donald Trump could pose challenges to the Reserve Bank of India's (RBI) plans for monetary policy easing, stated a report by Standard Chartered Bank.
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The report noted that the uncertainty around Trump's policies, combined with inflationary pressures, might affect the timing of interest rate cuts by the RBI.
It said, «Trump's policy could pose a hinderance to the timing of RBI's policy easing».
According to the report, while domestic inflation is expected to ease, the volatility in food prices and the potential inflationary impact of Trump's policies could delay it. Inflationary pressures also have broader implications for the financial markets.
The report noted that higher inflation can lead to a stronger correlation between stock and bond performance, as seen in 2022 when a rapid rise in inflation and interest rates negatively impacted both asset classes.
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