Cristian Maggio, head of emerging markets strategy at TD Securities, note that the Reserve Bank of India (RBI) has cut the policy repo rate by 25bps to 6.00% today, in line with their forecast and the almost unanimous consensus.

“As we anticipated, the RBI highlighted a deterioration of global economic activity and a slowdown in India as well. Against this backdrop, the inflation outlook remains benign and CPI projections have been lowered modestly. Risks remain broadly balanced. The decision was voted 4 to 2, with the two dissenters voting for a hold. The stance of monetary policy has remained unchanged at 'neutral,' but weaker economic activity and a soft patch in future CPI may open up to the prospects of further easing.”