Nomura economists say that despite a May rise in inflation, a Reserve Bank of
India (RBI) rate increase is not currently on the table. With the Strait of
Hormuz closed for three months and the government permitting gasoline and diesel
price increases since mid‑May, May CPI will be the key test of pass‑through; the
core basket shows some price pressures but most subcomponents have not
rebounded, pointing to weak consumer demand. Nomura expects the RBI to keep
policy rates unchanged for the remainder of the year.
