Lack of transmission of past repo rate cuts and concerns regarding the impact of unseasonal rains on food prices had prompted the Reserve Bank of India (RBI) to leave the repo rate unchanged at 7.5 per cent in its first bi-monthly monetary policy statement for 2015-16. Transmission to base rates has subsequently started, although it remains incomplete. Belying the apprehensions related to excess rains and crop damage, retail inflation has cooled to 4.9 per cent in April 2015, creating a strong case for a 25-basis point (bp) reduction in the upcoming policy review.

Source - http://www.business-standard.com