Citi drops forecast for two RBI rate hikes through March as interim US-Iran deal eases oil-price risks

Citigroup Inc. economists have withdrawn their forecast for two interest-rate hikes by India’s central bank through March next year, saying an interim US-Iran peace deal has reduced the risk of higher oil prices stoking inflation. India remains heavily dependent on oil imports from the Middle East and is also facing a weaker monsoon season as El Niño takes hold. Below-average rainfall so far is hurting the growing season for staples such as rice and soybeans and is also disrupting sectors including construction. The report highlights oil as losing price support on easing geopolitical tensions, while soybeans face rising output-cut expectations driven by weather.