What do you make of it. Are they getting it right. I think it was the appropriate step to take at this time in the life of the
exceptional uncertainty that has been created by this July 27. Decisions and weak communication of the Fed Reserve chairman
following the uncertainty about inflation evolution ahead is enormous. Whereas the guidance has been dropped and the fact
that could be nasty surprises. I had said the IBEX then the entirely correct thinking to safeguard the economy and shocks to
domestic information exchange rate and the current account that could arise in potentially ISE ahead.
The Fed could possibly repeat the mistakes that it made in the inflation readings last October to November and the possibility
of that repetition cannot be ruled out. So in that context the RBA has taken chosen frankly interest rate hikes and focus on
inflation and its renewed commitment to inflation is just absolutely impossible to do. Erik Schatzker earnings were
quickly a bit above. It would be nice. Could you give us a sense of whether the Reserve Bank is actually more concerned about the
value of the rupee than inflation itself. Let's put it this way the two are not entirely indistinct. And
so it's impossible to relate to disentangle the two in an increase in digesting a gene. It is the case that domestic
inflation while trending down and a fitting to my feet is coming down.
But at the same time it is the meaning we about the budget and debt that does reflect upon the ruby. My own view is that the
principal considerations of the interest rate differential and exchange rate pressures
would have leaves upon the central banks mind for sure. But at the same time the fact that inflation has been above the target
and the renewed focus upon DAX they are not taking any chances. The second thing is that there is uncertainty even for the
domestic rate rises. Reno you talk about how the RBI is front loading. How much more
mustard do given that the Fed is expected to be to continue to be aggressive.
Yes that is a movie that that is the critical question in my view. There is a lot of uncertainty about the conclusion
in evolution of inflation and growth dynamics though as of now the dominant reach of the US
policy rate has has moderated has been adjusted down looks. And of course that has an impact upon the Indian Tony the Indian
policy rate at the end point. So so the question is when do they want to adjust. My sense is that it would be sooner than dealing
adjustment. However it is extremely critically dependent upon the evolution of inflation and group dynamics. I think in the
next two three months are critical from the standpoint of the domestic evolution especially food prices down and the monsoon.
And I wish there is a lot of uncertainty and and the global evolution of inflation from it itself. So
it is so far to say every new data India's GDP target of 7 7 half percent is at risk.
My view it is most analysts sending during the central bank have retained their GDP forecast after the previous round of
lowering. But I do the quarterly results do especially the FTSE companies do not sure what effect already a great rebound in
consumption and that is a critical concern regarding the uplifting of aggregate demand ahead. Second export growth is
likely to weaken in the face of a slowdown of external demand that will have a feedback effect upon India. It would be a drag
on GDP growth. And the third is the extreme uncertainty between external and domestic demand which will reinforce domestic
investment because force habit of private business and spending is also dented by the elevated uncertainty abroad. And these are
not really ideal conditions in which private investments can contemplate capacity expansion. So I think that there is a risk
to GDP growth of seven point two percent per second. I mean the bare bones ahead and there could be further downgrades in the
further rate. It is very hard to get the sort of data. I mean it does show up in some of this high frequency stuff. Do you have
any idea how. Which is a major component of the economy. The informal economy is very.
The informal economy is reflected in our lack of Xi Jinping uplift and consumption as far as from the
FOMC June results from the subdued seems to be lost. And that is something that that's a that's a critical indicator that I what
I look out for in the absence of any any meaningful or significant leading indicators for the improving economy. So if
you can see that the two wheelers continued in two days in a bit of an uplift last month but not significantly so. And as long as
we can see that despite the good monsoon the banks since have been
they continue to be dampened. And the fact that there has been there is enough evidence of receiving this to reflect a
recovery. It is it can be seen in the contrast between the sale of luxury cars and the depressed VIX
bike seats. So the intent of this revival of the informal economy is not very optimal sine.