Shilan Shah, India economist at Capital Economics agrees the central bank has laid the foundation for a rate cut in through its statement, which had a dovish tilt.
On the outlook for economic growth, the RBI noted that domestic "activity is likely to be muted" in the current quarter, due to weak agriculture production and rural consumption domestic demand.
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Furthermore, the central bank turned more dovish on its inflation outlook, lowering its inflation target to 6 percent from 8 percent for March 2015.
Consumer price inflation, which the RBI tracks in setting lending rates, eased to 5.52 percent in October from 6.46 percent a month earlier, helped by slower rises in food and fuel prices.
The window for rate cuts will open in the first quarter of 2015, said Andrew Holland, CEO, Ambit Investment Advisory, applauding Rajan's decision to withstand pressure and keep rates on hold this time around.
Keeping the fight against inflation at the fore is important, said Holland, as easing too quickly would send the wrong signal to markets.
"Whilst businesses love to see lower interest rates, it's not really going to move the needle in terms of profitability," Holland said.
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Reform momentum will have a much bigger impact on corporate profitability than an interest rate cut at this moment, he noted.
"As inflation comes under control the opportunity for the RBI to reduce rates quicker will start to unfold in 2015," Holland said, predicting a rate reduction of 50 basis points in the first quarter of 2015.
The repo rate has been unchanged since January, when the RBI increased it by a quarter percentage point.