New Delhi, June 8 -- The Reserve Bank of India (RBI) has acted with intent; a cumulative 100-basis-point rate cut since February, to be followed by a bold 100-basis-point reduction in the cash reserve ratio (CRR) that will infuse Rs.2.5 trillion into the banking system later this year.

This was accompanied by a swift recalibration of the policy stance from 'accommodative' to 'neutral,' suggesting that India's central bank sees this as the outer limit of easing for now. In effect, RBI has declared that the liquidity bridge has been built. It is now up to others to cross it.

Also Read: RBI's policy review: Why this time is truly different

These moves, though significant, were largely in line with market (and media) expectations. They ref...