The Reserve Bank of India might go for steeper interest rate reductions in a move to support slower growth and controlled growth, Morgan Stanley said in its latest report.The global financial firm said that the central bank’s policy approach is likely to remain countercyclical, taking action to support the economy as momentum weakens.“We expect the RBI to respond with a deeper easing cycle, premised on slower growth, while inflation remains under control,” it said.Morgan Stanley now forecasts a total rate cut of 100 basis points (bps) in this cycle, with two more 25 bps cuts anticipated to be implied in the near term. This would also bring the repo rate down to 5.5 per cent.The report also flagged that in case the global economy slows down further, specifically in case of a recession in the US, which might hurt India’s economic growth, it would prompt the RBI towards more rate cuts.Apart from reducing interest rates, the central bank is also expected to deploy other tools to support the economy including sufficient liquidity in the system and regulatory easing to spur credit growth.On the fiscal front, Morgan Stanley expected the government to stick to its fiscal consolidation roadmap, with a continued focus on boosting capital expenditure as outlined in the Union Budget.While monetary policy will likely remain supportive, the report cautioned that it may not be enough to fully shield the economy from the impact of slower growth. Nonetheless, the RBI’s measures are seen as the first line of defence as domestic challenges mount.The central bank is also expected to stay flexible and respond in accordance with the changing economic landscape, and support credit growth via macroprudential easing.