India Insight:MPC keeps rates on hold,trims growth

Repo rate kept unchanged vs our and market expectation of a 25bp cut:

    All six members of the MPC (Monetary Policy Committee) voted to keep therepo rate (the rate at which the RBI injects liquidity) unchanged at 6.25% inthe policy review today. Accordingly, the reverse repo and marginal standingfacility (MSF) rate stand adjusted at 5.75% and 6.75%, respectively. Theminutes of the MPC’s meeting will be published on 21December and willrecord the views of each member.

    Scope of further policy easing remains, let the dust settle: We continue toexpect inflationary pressures to remain contained (~4.5% CPI inflationestimated in FY18) and see scope for a further 50