Further loosening from RBI very likely lies ahead: Capital Economics

Quotes from Capital Economics:

- The Reserve Bank of India's decision to cut both its repo and reverse repo rates by 25bp on Wednesday, to 7.50% and 6.50% respectively, was unscheduled but not entirely a surprise. 

- Indeed, we had argued that there was a significant chance of an inter-meeting cut following the budget last weekend. And with Governor Rajan voicing doubts over the accuracy of recent GDP data, which suggest that economic growth is strong, further loosening very likely lies ahead. 

- We continue to expect the repo and the reverse rates to end the year at 7.00% and 6.00% respectively, both 50bp lower than where they are today.