The weakness of inflation over recent months continues to outweigh concerns about currency depreciation and leaves the door open for the RBI to deliver one final rate cut at the conclusion of the MPC meeting on Friday 6th February. We are forecasting a 25bp cut to the repo rate, taking it to 5.00%, while the consensus expects no change. However, with the economy holding up and inflation set to rise back towards the 4% target, we think this will mark the end of the easing cycle.
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