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Bank of America-Merrill Lynch has said that the RBI will cut repo rate by 75-100 bps starting early 2015 and expects a rate cut even if Fed hikes US rates.
BofA says India vs US rate differential is already at 800 bps, far higher than average 460 bps since January 2003.
The banks adds that high FX reserves hold key for rupee stability, more than United States vs India rate differentials.
Lastly, the bank said that the Fed tightening will contain imported inflation by stabilising commodity prices.
