RBI Governor Raghuram Rajan earlier raises Repo rate to curb Inflation rate. As Consumer Price Index raise at 11.24%, all time high in this year,we expect hike in Repo rate by 0.25 bps on 18h December policy meeting.
India GDP rise by 4.8% in 3 Quarter of 2013 year and 4.4% in 2 Quarter of 2013 year. We expect GDP may take time to recover and come above 5% in next financial year. Our Index Industrial Production negative data indicated slow production in India. IIP on October 13 was decline -1.8% compare to previous month September 2%.
Imports and exports data affect Rupee in near term, which was $24.61 billion on Oct compare to previous month $27.27 billion in Exports and $33.83 billion in Imports on Oct compare to previous month $37.83 billion. We have seen positive improvement in Export data, which affect IIP data. India Current Account Balance was-$5.2 billion on 3 Quarter compare to previous -$21.77 billion.
Currently India is facing Election in April May 2014, which make Government helpless to curb Rupee. However, trader should watch Fed meeting decision which will clear Fed tapering issue.