RBI: Consensus is for no change to the 6% benchmark repo rate – RBC CM

RBI announces its monetary policy decision and consensus is for no change to the 6% benchmark repo rate explains analysis team at RBC Capital Markets.

Key Quotes

“Consensus has pared back expectations for a near term rate hike and INR has underperformed Asian EM over the past month, as we had expected. We are not convinced that the RBI is done easing. Both urban and rural CPI inflation have been in a strong downtrend since August, driving real interest rates up through the upper end of the RBI’s stated target range. Though we agree that the RBI is near the end of its easing cycle, we don’t think it is done.”