New Delhi: Reserve Bank Governor Raghuram Rajan on Tuesday cut repo rate by 50 basis points at 6.75 per cent. The CRR is kept unchanged at 4 per cent to help support the domestic economy at a time when consumer inflation is at a record low. RBI also may reduce the percentage of house loan.
The RBI has given indications that there is room for more rate cuts. The RBI already eased the policy rate by 75 bps so far this year. Inflation looks set to undershoot the government’s projection of 6 per cent inflation by January 2016.
The RBI Governor had been under pressure from the Finance Ministry as well as corporate executives to cut interest rate to spur recovery and mitigate the impact of slowing China on India.