Policy pivot still several months away

We agree with consensus expectations that the MPC will keep policy unchanged at the conclusion of its meeting on Thursday 8th February. Further ahead, the strength of the economy and still-elevated inflation suggest that the central bank will be in no rush to cut the repo rate. We expect the RBI to only start easing policy in Q3 once headline inflation is closer to the 4% midpoint of the 2-6% target range.

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