India: RBI cuts by unusual 35bps – TD Securities

Cristian Maggio, head of emerging markets strategy at TD Securities, points out that the RBI has cut rates, as expected by TD and the consensus, but by an unexpected 35bps instead of a conventional 25bps.

Key Quotes

“The stance of monetary policy has remained accommodative, voted unanimously by the MPC. Given a downside revision to India's growth for this year, and benign inflation projections, the RBI's cut today is mostly meant to stimulate growth.”

“Going forward, it seems that the dovish stance of the MPC and domestic and external conditions support further easing. We continue to forecast a 25bps cut in September.”