With Composite PMI moving up, is this the right time for RBI to cut rates?
While manufacturing PMI fell to 3-month low in February, that was more than offset by an 8-month high services PMI
The chart shows the HSBC India Composite Purchasing Managers’ Index (PMI), a seasonally adjusted monthly index of private sector activity, is at a three-month high.
While the manufacturing PMI fell to a three-month low in February, that was more than offset by an 8-month high services sector PMI. Should RBI have cut its policy rate at a time when the Composite PMI is signalling a revival of overall demand?
The central bank can find comfort from the muted level of inflation, with the PMI press release saying: “At the private sector overall, output prices rose at a modest pace that was well below the series average."
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