Is the RBI Behind the Curve? Gaura Sengupta and Dhiraj Nim Quiz Each Other On Rates, Liquidity and the Rupee ahead of October MPC

A rate hike may be coming. But is the RBI catching up, normalising policy or beginning a longer fight against inflation?

Ahead of the October monetary policy decision, Gaura Sengupta, Chief Economist at IDFC FIRST Bank, and Dhiraj Nim, Economist and FX Strategist at ANZ, discuss the choices facing India’s central bank in this exclusive BasisPoint Insight conversation.

Both favour a 25-basis-point increase, but their assessments differ on inflation’s persistence, the appropriate policy stance and the tools needed to absorb excess banking-system liquidity.

They explore:
🔹Why “behind the curve” may be the wrong diagnosis for India.
🔹When supply-side shocks require a monetary policy response.
🔹How FCNR(B) inflows complicate liquidity management.
🔹Whether the RBI can chart a course independent of the Federal Reserve.
🔹What rising bond supply means for India’s yield curve.
🔹How the RBI should balance rupee adjustment with reserve protection.
🔹Why growth has proved more resilient than expected.

Watch or listen to the conversation for two perspectives on the hike—and the harder decisions that follow.