PIMCO Maintains Neutral Stance on India, Forecasts 75 Basis Point Rate Hike
Global bond manager PIMCO adopts a neutral outlook on Indian assets, projecting a 75 basis point interest rate increase by the Reserve Bank of India.
POLICY WIRE — New York, USA — Global investment firm PIMCO has adopted a neutral position regarding Indian assets, signaling a cautious outlook as the nation navigates a shifting monetary landscape.
Stephen Chang, a managing director and portfolio manager for PIMCO Asia, indicated that while India continues to demonstrate robust economic growth, the firm is closely monitoring re-emerging inflation risks tied to energy and food costs.
The firm anticipates that the Reserve Bank of India will implement a total of 75 basis points in interest rate hikes throughout the current tightening cycle. This projection sits below current market expectations, which have been influenced by persistent inflationary pressures.
Market analysts remain split on the trajectory of the central bank’s policy. Sakshi Gupta, an economist at HDFC Bank, noted that expectations for further tightening remain, stating, We expect another 50-75 basis points in rate hikes over the coming months.
As the Reserve Bank of India continues to address broadening price pressures, the central bank is expected to pursue rate adjustments at successive meetings extending into next year. PIMCO maintains that these policy shifts will play a critical role in shaping future currency valuations and capital flows within the region.
Reporting by Policy-Wire (PW)
