<b>Anubhuti Sahay</b>: More rate cuts seem likely

So, the key question is has the rate-cutting cycle come to an end in India. We think so

Of the three surprise decisions by the Monetary Policy Committee (MPC) meeting since Reserve Bank of India (RBI) Governor Urjit Patel assumed office in September, possibly the latest decision to change its stance from accommodative to neutral was the least unexpected. This was announced even as RBI expects FY18 inflation to probably average about 4.5 per cent (assumed by looking at their H1FY18 and H2FY18 consumer price index or CPI forecasts). With its real rate preference defined at about 125 basis points (bps), ideally this indicated room for another 25-50 bp cut.

So, the key question is has the