JP Morgan co-head of economic research Jahangir Aziz says the Reserve Bank of
India could deliver a first 25bp rate hike this year, partly because
policymakers have strongly signaled such a move. Aziz warned the economy may be
in a stimulus-driven sugar high that will fade and said markets may be pricing
too many hikes; financial markets imply roughly 100bp of tightening this year.
He urged caution, saying authorities should wait to assess the impact of initial
hikes on domestic financial conditions and real activity before declaring a
hiking cycle.
