RBI cuts repo rate by 25 bps to 6.50 per cent, CRR unchanged

The Reserve Bank of India cut the repo rate by 25 basis points to 6.50 per cent and left CRR unchanged at 4 per cent.

RBI Governor Raghuram Rajan retained the "accommodative" stance.

In all, Rajan reduced repo rate by 125 bps in 2015. However, banks have failed to pass on the same, complaining of tight liquidity in the financial system.

It also increased the reverse repo rate to 6 per cent.

RBI got room to cut rates after inflation eased to 5.18 percent in February and the Indian government kept borrowing and spending in check.
The RBI is focussed on attaining inflation targets - aiming for around 5 percent by March 2017, and 4 percent in the medium term.