The RBI further slowed the pace of monetary tightening with a 25bp hike to the repo rate (to 6.50%) today and, though it has left the door ajar for further tightening, the softer growth outlook and improvement in the inflation picture suggests to us that the hiking cycle is now at an end. Meanwhile, we can’t claim to have insight on the exposure of Indian banks to the Adani Group, but we don’t share the RBI’s confidence over the resilience of the banking sector should loan losses start to mount.
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