Analyst: Interest rates may still have limitations after the Indian central bank cuts rates.

Apurva Sheth of Samco Securities stated that even after the Reserve Bank of India's rate cut on Friday, real interest rates are still hovering around 5%, which is too restrictive for an economy that needs healthy nominal growth to sustain profitability and tax revenues. He mentioned in an email that in a situation of controlled inflation and resilient growth, the RBI still has plenty of room for further easing. The weakening currency is a major concern for the RBI. He said, "Just after the rate cut, we saw the rupee giving back some of its gains from the past two days." Further rate cuts will push the rupee lower until foreign securities investments and foreign direct investments return on a large scale. He added that after moderate inflation, exchange rates and growth are the two main factors that the RBI currently needs to balance.