Market Eye Week Ahead: India debt/fx markets await RBI rate review

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RBI to release macroeconomic review for fiscal first half. Reuters RBI to release macroeconomic review for fiscal first half. Reuters
SummaryIndian rupee likely to be negatively affected if equities fall on any rate hike.

Reserve Bank of India's (RBI) monetary policy review on Oct. 29 will be a key, with traders expecting a 25 basis points (bps) hike to fight inflationary pressures.

While a 25 bps rate hike has been largely priced in, a bigger hike or further signs of tightening from the RBI will lead to a sell-off in bonds.

Dealers are waiting to see whether the RBI will cut the marginal standing facility rate or raise the cap on banks' repo borrowing to ease liquidity pressures.

Indian rupee likely to be negatively affected if equities fall on any rate hike.

KEY EVENTS/FACTORS TO WATCH

Mon: RBI to release macroeconomic review for fiscal first half

Tue: RBI policy review/press conference

Wed: RBI post policy telecon with analysts

* Fri: Foreign exchange reserves data

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