India Economic Watch: How much need RBI OMO?
• We expect RBI to OMO US$5bn by March atop US$9.5bn since December. This should pull lending rates down by 50bp in April-Sep.
• Base case: US$3bn of OMO by March assuming RBI buys FX of US$3.3bn with seasonality supporting exports and USD peaking off.
• Bear case: US$6.3bn of OMO by March if RBI is not able to buy FX due to a strong USD and/or portfolio outflows.
Indranil Sen Gupta
AsiaPac
Asia | India
GEM Economics
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