The drop in inflation to a multi-decade low ought to outweigh concerns about the weakness of the rupee, and leaves the door open for the RBI to resume its easing cycle at the conclusion of the MPC meeting on Friday 5th December. We are forecasting a 25bp cut to the repo rate to 5.25%. Further ahead, we expect a final 25bps cut (to 5.00%) in February. Our forecasts are more dovish than market pricing.
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