JUHI JAIN

  The Reserve Bank of India's Monetary benchmark Committee (MPC) voted to maintain the benchmark repo rate at 6.5 percent on Friday. In the context of liquidity in the system, RBI Governor Shaktikanta Das said, “It’s a turning pitch and I would like to play my shots very carefully.”   Can he say the same for the global headwinds that are now likely to put upward pressure on inflation in India via the currency or imported inflation route.   After dealing with domestic inflation, the RBI is now up against a whole new set of global challenges. These are, in no particular order, the steady appreciation of the US dollar, rising 10-year bond yields, and foreign portfolio investment (FPI) outflows.   The MPC will need to balance the need to keep inflation under control with the need to support economic growth. Let’s take a look at the global headwinds:  Steady dollar appreciation             The US dollar index (USDX), a measure of the value of the US dollar relative to a basket of foreig