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2 Jun 2015
Reserve Bank of India (RBI) slashes key repo rate by 25bps to 7.25%
FXStreet (Mumbai) - Reserve Bank of India (RBI) Governor Raghuram cut the key repo rate to 7.25% at Tuesday's monetary policy meeting, from 7.50%.
Inflation, the key consideration, dropped in April to 4.9% year-on-year, from 5.2% in March. As a result, headline inflation is now even further below the RBI’s 6.0% target for January 2016.
RBI Governor Raghuram Rajan has already cut rates twice this year as inflation in the South Asian country remained timid. He left the rate unchanged in April, waiting for the consequences of unseasonal weather at the beginning of the year on food prices.
In addition, Rajan has not been satisfied with commercial banks' slow translation of the earlier cuts in their lending rates.
Inflation, the key consideration, dropped in April to 4.9% year-on-year, from 5.2% in March. As a result, headline inflation is now even further below the RBI’s 6.0% target for January 2016.
RBI Governor Raghuram Rajan has already cut rates twice this year as inflation in the South Asian country remained timid. He left the rate unchanged in April, waiting for the consequences of unseasonal weather at the beginning of the year on food prices.
In addition, Rajan has not been satisfied with commercial banks' slow translation of the earlier cuts in their lending rates.