RBI's surprise 50 bps rate cut risks rupee depreciation, lowering forward premiums, and reducing carry trade appeal.

• RBI's larger-than-expected rate cut weakens the rupee by reducing carry, trade incentives, and hedge demand.
• Declining dollar/rupee forward premiums signal weaker rate differentials, increasing depreciation risks.
• Analysts warn further rate cuts are likely if India's growth data softens, adding pressure on the rupee.