India could see two rate hikes in the initial monetary policies of next financial year, said Sameer Goel, head of Asia macro strategy of Deutsche Bank.

“The oil price reversal has been very quick and one needs to see where it ultimately settles to get a better gauge of the trajectory for next year. However, we still think that there is probably chance (of) ... one or maybe even two more rate hikes to come in the cycle,” he said.

Goel thinks that oil has been a big story for India and is also very critical at present.

"I think for India, very specifically, oil has clearly been the bigger story and to that extent also now becomes very critically dependent upon where we go from here on oil and therefore how we lead up to the organisation of the Petroleum Exporting Countries (OPEC) meeting. I think, it clearly looks like there is still some scope for follow-through,” he said.

On rupee, he said, “...it was clear that a lot of the rupee valuations had corrected as far as the worsening and the basic balances were concerned. So I think with the correction in valuation and now the big move in oil, that has caused this big shift in rupee to take place- some of that can still probably follow through but the broader issues with respect to its dependence on foreign flows and the possible tightening in sort of pricing quantity of dollar-liquidity next year still remains."

First Published:Nov 22, 2018 11:59 AM IST