Inflation in India is on a decelerating path, says UBS

So if you look at the inflation data which just got released yesterday, the number was 4.75. Actually it was lower than what the consensus was expecting. And if you look at the forecast going forward, we are actually of the view that inflation is on a decelerating part. We expect inflation to be below 4% by the September quarter, partly on account of comfortable code inflation, also on account of what we are seeing is a very statistical base effect which will be at work. But I think what is interesting is that inflation is likely to move higher back to four, 4 1/2% in second-half FY25. If I look at my monthly inflation transactory and where there is a good news, my inflation focus are actually trending 30 basis points below the RBI focus of 4.5%. But we are still waiting for the upcoming budget announcement because post election verdict, I think there's a lot of focus on to look at the government spending mixed towards consumption versus CapEx before we look at how the inflation focus and is there any need to review it at this stage? Tommy, the the currency has been remarkably stable over the last couple of years, which has been impressive because it's historically, as you know, had a sort of a trend depreciation path. Are you worried about that in the medium term though that that that we potentially get a break of dollar rupee, you know well above 85? So if you look at USD, INR, our expectation is again it is expected to be range bound. If you look at our India's external position, there's a very strong external balance buffer plus there is an expected boost which we are expecting from the bond index inclusion almost to the tune of $25 billion of inflows, which we are expecting in the next 12 months. And if I look at the medium term goal, RBI is the government is focusing on boosting manufacturing growth as well as services exports. So I would say USD, INR largely our viewers that it should be trending between 8384. Range over the coming months. Now the dollar is also very interesting, especially with the Fed rate cut expectation getting pushed forward from September to December.