HSBC India CEO highlights effects of narrowing India-US inflation gap on currency and FDI

The narrowing inflation gap between India and the United States is reshaping the economic dynamics of both countries, with implications for currency exchange rates, trade relationships, and financial policies.

Hitendra Dave, CEO of HSBC India, in a discussion with CNBC-TV18, highlighted this significant economic shift. He pointed out that historically, currency weakness was largely attributed to inflation differences, which have recently decreased, even turning negative in some cases.

In the US, the state of wholesale inflation has stabilised in November, suggesting a slow but steady decline in price rises. According to the Labor Department, the producer price index, which measures inflation at an early stage before it affects consumers, remained constant from October to November, after falling 0.4% in the previous month.