Mitul Kotecha, senior emerging markets strategist at TD Securities, points out that in India, RBI has cut its repo rate to 6.25% from 6.50% and changed its stance to “neutral” from “calibrated tightening” against TD and consensus expectations.
Key Quotes
“The RBI placed a lot of emphasis on weakness in both external and domestic growth factors and a softer near term inflation profile.”
“The MPC cut its inflation and growth forecast, but we think the RBI’s inflation forecasts may prove optimistic.”
“We are constructive on the INR in carry adjusted terms, but expect gradual spot depreciation over the weeks ahead.”
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