Softer march inflation reassures RBI’s policy stance, raises scope for further rate cut

Summary

India’s March CPI inflation outturn echoed ongoing disinflationary momentum across the economy and provides comfort to RBI given its present accommodative policy stance. Given India's favorable growth inflation dynamics, we foresee scope for a further 25 bps rate cut by RBI at its June credit policy. However, room for aggressive policy easing in 2015 remains limited.

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