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The repo rate was left unchanged at 5.5% when the Monetary Policy Committee (MPC) met in early October, even though the Reserve Bank of India (RBI) believed there was room to ease. To be sure, the commentary was dovish, indicating chances of a rate cut in December. This was accompanied by a cut in the forecast for retail inflation for the current year by a chunky 50 basis points to 2.6%. Now, as widely anticipated, retail inflation for September has come in at 1.5% year-on-year, the lowest levels since June 2017. While this will head up to levels of 4.5% by April-May next year, it should not be reason to hold back a cut in repo rates because the growth momentum could slow. We now have evidence that the 50% US tariffs have hurt exports to the US—in September, they fell 12% y-o-y. Glob