Asian Fund Managers Turn More Optimistic on Growth but Curb Equity Return Expectations: BofA Survey 
U.S. Stock Futures Edge Higher as Micron Earnings Boost AI Sentiment Ahead of CPI Data 
FxWirePro: Daily Commodity Tracker - 21st March, 2022 
South Korea Warns Weak Won Could Push Inflation Higher in 2025 
Kevin Hassett Says Inflation Is Below Target, Backs Trump’s Call for Rate Cuts 
EU Delays Mercosur Free Trade Agreement Signing Amid Ukraine War Funding Talks 
Asian Markets Rebound as Tech Rally Lifts Wall Street, Investors Brace for BOJ Rate Hike 
Oil Prices Steady in Asia but Headed for Weekly Loss on Supply Glut Concerns 
BOJ Poised for Historic Rate Hike as Japan Signals Shift Toward Monetary Normalization 
The Reserve Bank of India will likely take advantage of expectations that inflation will remain low in the near-term and change its policy stance back to ‘neutral’ from ‘calibrated tightening’ at its February meeting.
That will be a test for the new Governor Shaktikanta Das, who’s policy bias will be watched carefully as the risk for future inflation is still skewed towards the upside.
India’s CPI inflation eased to 18-month low of 2.19 percent in December, down from 2.33 percent a month ago. Although the core consumer inflation, which excludes volatile food and fuel, has remained sticky at 5.7 percent.
Increased government spending ahead of national elections in May, is expected to be inflationary.
“We expect a more dovish monetary policy under the new governor Das. We do not foresee a rate hike anymore this year. Should inflation pressures be contained (the real policy rate is currently around 4 percent) and the current account remains under control, the RBI may even opt for one or more rate cut,” noted ABN Amro.
As per the mandate, the central bank has been mainly focusing on inflation-targeting, but the Modi-led BJP government seems to prefer a stimulative monetary policy stance to boost growth ahead of the general elections in May.
In a recent ironic twist, the central bank, under the new leadership of Governor Das, is expected to transfer an interim dividend of 300-400 billion rupees to the government by March. That would be about four times the amount paid in 2018.
"We foresee that it will be difficult for the BJP to seize a powerful majority in India's Lower House, which means Modi's party will have to resort to coalition-based policymaking," noted Hugo Erken, senior economist at Rabobank.
"Under this scenario, we can expect the BJP's business-friendly reform agenda to stall and the odds of breakthroughs on land and labour market reforms will be marginal at best. These reforms are necessary to prevent a levelling off of potential growth."
