No Rate Cut

RBI governer kept key policy rate unchanged but indicated future action to support growth by stating "inflation moving closer to the target".

He expressed his hope from Unoin Budget 2016-17 to introduce some structural reforms to enable the central bank to boost with cheaper money.

RBI governer  while announcing the policy rates stated “Structural reforms in the forthcoming Union Budget that boost growth while controlling spending will create more space for monetary policy to support growth, while also ensuring that inflation remains on the projected path of 5 per cent by the end of 2016-17,”. 

Mr Rajan said that RBI is likely to suceed in keeping retail inflation under 6% in January 2016 as per the inflation targeting agreement signed with Government with the help of some external factors like low commodity price. He also hoped that the inflation is likely to be around 5% by January 2017 under the assumption of a normal monsoon but put a cautionary note for the implementaion of recommendation of seventh pay commission. 

Governor said he expects 7.6 per cent GDP growth next fiscal, based this on normal monsoons, the large positive terms of trade gains, improving real incomes of households and lower input costs of firms.