Overview

• Retail inflation eased to 2.10% in June, its lowest since January 2019, driven by a 1.06% drop in food prices.
• ICICI Bank expects the RBI to trim the repo rate by 25 basis points to 5.25% at its August policy meeting and has cut its average inflation forecast for FY26 to 2.9%.
• Morgan Stanley projects one more 25 bps rate cut in October but sees increased chances of an August move given rapid disinflation.
• Exports fell to $35.14 bn in June, down nine percent from May, and the trade deficit narrowed to $18.78 bn, a four-month low.
• India and the US are racing to finalize an interim trade deal before reciprocal tariffs take effect on August 1.