USD/INR rebounds even as RBI Governor says India unlikely to face a situation of stagflation

In an interview with the Financial Times (FT) published on Monday, Reserve Bank of India (RBI) Governor Shaktikanta Das said that he believes the consumer inflation should soften in the coming month but rules out stagflation scenario.

Key quotes

“I do not agree that we are likely to face a situation of stagflation.” 

“I am of the view that consumer inflation, going forward, should moderate.”

“The government will announce more growth-supporting measures.”

“But whatever fiscal expansion they undertake will be very calibrated and very prudent in its approach.”

USD/INR rebounds

USD/INR rebounds in tandem with the US dollar, as the USD bulls are rescued by the month-end flows. The above comments fail to support the rupee. 

At the time of writing, USD/INR jumps 0.50% to trade at 73.48, having hit multi-month lows at 73.05.