India: RBI seen hiking if CPI tops 6% – Commerzbank

Commerzbank Research expects India’s October CPI inflation to rise above 6% year‑on‑year, driven by high Oil prices, strong domestic demand and an unfavourable base. The report notes RBI’s projections keep inflation near the top of its target band through mid‑2027, implying further rate hikes. OIS pricing suggests cumulative tightening of nearly 90bp by February 2027.

Sticky inflation keeps RBI on tightening path

"It is expected to climb further and could well exceed 6% you compared to 5.5% in September."

"More worryingly for RBI, this low base effect will persist into November and December, which is likely to keep inflation elevated above 6.0% throughout Q4 2026."

"In the October review, RBI projected inflation at 6% in Q4 2026, and for it stay firm for the next two quarters, at 5.7% in Q1 2027 and 5.6% in Q2 2027."