India: CPI will remain well above the target band – TDS

India is scheduled to release some economic data throughout the day. Economists at TD Securities take a look at the CPI figures, while the USD/INR pair trades at 74.24.

Key quotes

“We expect CPI to fall to 7.04% y/y in Feb from 7.59% y/y previously, its highest since May 2014.” 

“Food price inflation, the major culprit explaining the rise in retail inflation, is likely to remain elevated, but is likely to ease from its 11.8% y/y pace recorded in Jan.” 

“CPI is likely to remain well above the RBI's 2-6% band, which will limit its room for manoeuvre even as governor Das highlighted that the option to ease remains an option to combat the impact of COVID-19.”