Repo rate, CRR unchanged; RBI trims inflation forecast

Citing inflationary concerns, the RBI on Tuesday kept the key policy rates unchanged. While the benchmark lending (repo) rate at 7.25 per cent and the Cash Reserve Ratio (CRR) at 4 per cent remained the same, the RBI trimmed the consumer inflation forecast for January-March 2016 by 0.2 per cent in its third bi-monthly policy review this fiscal, saying that growth is beginning to look up gradually.

“lower crude prices and better-than-expected monsoon are the reasons for trimming the January-March consumer inflation target,” RBI said. However, keeping the Government’s hopes alive, RBI Governor Raghuram Rajan indicated that he could go for a rate cut ahead of the next policy review on September 29, depending on the macro-economic data and how the monsoon pans out.