the 'calibrated and limited' nature of rate support hereon. Scale of rate cuts is closely tied to the government's sustained efforts to correct the twin imbalances and moderating inflation trajectory. Even as few quarters price in substantial rate cuts going forward, we see room for only 75 bps more cuts by end-year."
SHAKTI SATAPATHY, FIXED INCOME STRATEGIST, AK CAPITAL, MUMBAI
"As expected a 25 bps repo cut is well justified amidst sticky retail inflation and subdued investment activities. Further the 25 bps CRR cut though a bit of a surprise, signals limited chances of further OMOs in the rest of the fiscal. The tone of the policy seems neutral with due consideration to support growth at a higher inflation trajectory. We expect the bonds to trade rangebound with limited chances of further OMOs up till budget.
"We expect another 25 bps rate cut at the March policy meet and the qualitative fiscal management measures during the upcoming budget session would be the guiding factor in deciding the quantum and timing of future rate cuts in the next fiscal."
JONATHAN CAVENAGH, STRATEGIST, WESTPAC, SINGAPORE
"Combined with the reasonable drop in the inflation forecast, the market is probably encouraged to belief more cuts will be forthcoming. The fiscal side will be critical though and if the RBI feels the government's reform push is slipping, rate cuts will be put on the back burner.
"Indian equities have recovered earlier losses but are only up modestly. A more decent reaction in USD/INR but this move is probably being helped by the broader move lower in USD/Asia. Further downside in USD/INR is likely, although firmer support is likely to emerge around the low 53.60/high 53.50 region in terms of the spot market."
SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI
"The Reserve Bank of India is definitely less hawkish in its statement, and we think it will remain in the easing mode in 2013. We think they will cut the repo rate by another 50 basis points in the next five months.
"The cut in the cash reserve ratio is very positive for banks, but we think it will be the last CRR cut. However, the RBI will continue to buy bonds through its open market operation to ease tightness in liquidity."
AJAY SETH, CHIEF FINANCIAL OFFICER, MARUTI SUZUKI, NEW DELHI
"It is a small reduction. Industry was hoping for a 50 basis point cut but it is smaller than what we were expecting. Hopefully, rate