Here's What to Look for in India's Rates Statement
- Almost all economists see no change in key rate on Tuesday
- On watch for measures to address bank liquidity tightness
Commuters stand at the carriage doors of a train as it arrives at Mumbai Central Train Station in Mumbai, India, on Friday, Jan. 22, 2016. Global investors are keeping faith in India's rupee bonds, even as the currency inches toward the record low reached in 2013, saying the nation's finances have improved over the past 2 1/2 years.
Photographer: Dhiraj Singh/BloombergThe global financial-market turmoil triggered by China the past month gives Indian central bank Governor Raghuram Rajan plenty to think about at Tuesday’s policy meeting. Even so, high on his mind will be a very domestic risk: Asia’s widest budget deficit.
Rajan signaled concern about fiscal deterioration on Friday, saying there’s not much to gain from more budget stimulus right now. He said that straying from budget goals risks pushing up bond yields and denting the government’s credibility. The remarks contrast with his action last year, when he lowered the benchmark interest rate days after Finance Minister Arun Jaitley pushed back deficit targets in favor of stimulus spending.