IMA Asia's Kishore: RBI's Hawkish Pause May Extend into 2024

The video discusses the Reserve Bank of India's (RBI) focus on domestic economic conditions, particularly inflation, over international factors. It highlights the impact of rising food prices, such as tomatoes, on inflation and RBI's monetary policy. Despite regional trends towards loosening monetary policy, the RBI maintains a hawkish pause due to inflation expectations and the significant weight of food inflation in the CPI basket. The video also touches on the stability of the rupee and the potential for government stimulus in light of upcoming elections, while considering fiscal deficit concerns.

What is the primary focus of the RBI according to the first section?

• Domestic inflationary conditions

• International developments

• Currency exchange rates

• Global economic trends

Why is the RBI maintaining a hawkish pause in its monetary policy?

• To support the rupee

• To align with other EM regional central banks

• Due to falling fuel prices

• Because of rising food inflation

What percentage of the Indian CPI basket is constituted by food inflation?

• 45%

• 75%

• 30%

• 60%

How is the current account deficit expected to change by the end of the year?

• Decrease to 1% of GDP

• Increase to around 1.5% of GDP

• Remain stable at 2.2% of GDP

• Widen significantly beyond 3% of GDP

What is the Modi government's stance on fiscal deficit in light of the upcoming election?

• They will implement aggressive populist measures

• They plan to ignore the fiscal deficit concerns

• They are cautious about the fiscal deficit's impact on sovereign rating

• They are likely to increase the fiscal deficit significantly