Macroeconomic Forecast India

In line with our call, the Reserve Bank of India (RBI) kicked off its monetary easing cycle in April, albeit by a larger-than-expected 50 basis points (bps), taking the benchmark repo rate down to 8.00%. With core inflation still on the retreat, money supply growth at cyclical lows, and the Q112 bounce in economic activity starting to fade, there was sufficient room and motivation for policymakers to start loosening.

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