India Has Room to Make a One-and-Done Interest Rate Cut

The Reserve Bank of India is set to change course at its first policy review under Governor Shaktikanta Das, dropping its hawkish bias and assigning a greater weight to growth in its policy objective. Bloomberg Economics expects the RBI to cut its policy repo rate by 25 basis points and adopt a neutral stance at its Feb. 7 meeting, pulling back from what BE thinks was a hasty switch to calibrated tightening in October last year. Beyond this week’s policy review, BE expects the RBI to stick to a data-dependent path, which would likely mean a pause until end-2019.