India: RBI to cut repo rate by 25bp – TDS

TD Securities analysts suggest that after cutting rates at its February meeting and shifting its stance to “neutral”, they are expecting the Reserve Bank of India to cut its repo rate by 25bp to 6.00%, just ahead of elections.

Key Quotes

“Low and declining inflation, with CPI dropping to 2.57% y/y in February and likely to stay soft over the coming months, will give the RBI comfort in easing policy further.”

“At the last meeting the RBI expressed growing concerns about growth. Signs of softening growth, with GDP expanding by 6.6% y/y in Q4 18, its slowest pace in five quarters, and some softening in high frequency data, also suggest potential for further easing.”