Mumbai: Singaporean brokerage DBS Tuesday said the Reserve Bank is unlikely to cut rates further due to factors like the US Fed's likely tightening in December and the progress on Brexit.


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It said the 0.25 percent cut by RBI in October was a "pre-emptive" one and the central bank will not go in for another cut despite a likelihood of inflation coming to under 4 percent levels in November.


"Further easing is not our base case as yet given the likelihood of external uncertainties, particularly the Fed in December and Brexit in the first quarter of next year," it said in a note.


Interestingly, most of the analysts have been saying Governor Urjit Patel-led Monetary Policy Committee will go in for another cut at the next review on December 6 while some have also been building a case of two more cuts.


Those pitching in favour of the cut point out to the dovish commentary from Patel and also the MPC's minutes.


DBS said there are "small odds" of a rate cut in the March quarter, pointing to the lowering of the real rate to 1.25 percent from 1.5-2.0 percent earlier.


It also said that RBI's decision not to commit to the 4 percent inflation for March 2018 also leaves the MPC with "sufficient legroom" to cut rates further.


DBS also acknowledged that the inflation trajectory has remained fairly contained during the year, which has seen the September headline number coming to 4.3 percent.


"In light of a normal monsoons, smaller rise in minimum support prices and administrative steps undertaken by the government, food inflation is likely to stay below 5 percent this year," it added.


The brokerage also revised down its full year inflation target to 4.8 percent from the earlier 5 percent and added that it may climb up to 5 percent in 2017 on GST implementation impact.