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India's retail inflation fell to a record low of 0.25% YoY in October, with food prices declining for the fifth consecutive month by 5% YoY. Nomura estimates that full transmission of recent GST cuts would have reduced inflation by 1.6pp. Despite the continued drop in inflation, Nomura considers a policy rate cut at the December MPC meeting a close call, with a terminal repo rate of 5.00% over the course of the December and February meetings.

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