The Reserve Bank of India's decision in the credit policy to cut the repo rate by 25 basis points and lower the target for real interest rate suggests that significantly easier monetary policy is coming, says Chris Wood, the author of CLSA's newsletter GREED and fear.
"This is not irresponsible since credit growth has been running almost in line with nominal GDP growth for five years," says Wood as he expects to see more rate cuts next year.
India's retail inflation in September fell to a 13-month low of 4.31 percent mainly on the back of a sharp fall in food prices.
"From an Indian equity standpoint, monetary easing in the context of a stable currency is an obvious positive," said Wood in a newsletter.
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