RBI unlikely to panic over rupee sell-off

India has not been immune to the turbulence that has hit EM markets over the past few days in the wake of the unfolding crisis in Russia. This has led to suggestions that the RBI is now likely to delay policy loosening. But local market moves have been fairly small and, even if the EM sell-off was to intensify, India would stand a good chance of riding it out given the reduction in the current account deficit since a year ago. Accordingly, we are sticking with our view that the RBI will cut policy rates in early 2015.