RBI may cut repo rate further

Despite the global headwind the Indian economy is is continue to performing well. The economy is growing around 7.3 percent in 2015 is expected to post 7.5% growth next year. 

On the other hand, the inflation rate in the economy is below target.The central bank targeted the inflation rate at 6 percent for end of 2015, but the current inflation rate around 5.4% is below its target. The Reserve Bank of India (RBI) opted to ease its monetary policy in last September by cutting repo rate of 50bps is expected to cut further in near future.

"While further cuts cannot be ruled out, we believe higher inflation as favorable base effects fall away will keep RBI from easing further", states Danske Bank.