RATE CUT WELCOME, BUT START OF EASING CYCLE NOT ASSURED

THE long-awaited relief from high interest rates has finally arrived.

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The Reserve Bank's Monetary Policy Committee has cut its repurchase or repo rate by 25 basis points to 6.25 percent. The decision to lower the rate coming with the backdrop of moderating growth, rising global uncertainties and easing inflationary pressures-is expected to spur household consumption and investment. Headline inflation is hovering above the RBI's 4 percent target and will likely stay above in the next fiscal too. But as Governor Sanjay Malhotra noted, the need to remain supportive of growth moved the rate cut needle. However, he maintained the policy stance at neutral, allowing himself flexibility to change rates in the future to suit the evolving macroeconomic conditions. So