The ECB raised the policy rate by 50bps to 2.5% and provided hawkish guidance. The central bank pre-committed to raising rates by 50bps in the March meeting while indicating that rates need to be at restrictive territory for a considerable period of time. Meanwhile the BoE raised the policy rates by 50bps to 4% and indicated that further rate hikes are possible. However, it expects inflation to fall sharply over a two to three year period that has got the market to expect that the BoE is close to the end of its tightening cycle.

2 Days ago

The FOMC delivered a slower pace of policy rate increases of 25bps taking the Fed funds rate to the 4.50-4.75% range resulting in a cumulative tightening of 450bps in the ongoing cycle. The slowing in pace was done to take into account: (a) inflation has slowed and (b) that the full-effects of monetary tightening delivered has not totally filtered through to the economy. ICICI Bank maintains its view that there is likely to be a cumulative rise of a further 50bps with 25bps likely in March and another 25bps likely in May that could result in a terminal rate of 5.00-5.25%

3 Days ago

Union Budget 2023-24 outlined seven priority areas - including development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector. The government will spend a record INR 10tn on capex (3.3% of GDP), extending its strategy to revive growth after Covid-19. Fiscal deficit target is estimated at 5.9% of GDP in FY24, compared with 6.4% in FY23.

3 Days ago