RBI had also enforced the marginal cost of lending rate (MCLR) from April 1 to ensure better transmission of the real policy rate. He let the policy rates remain unchanged. Since Jan 2015, RBI has cut the repo rate by 1.50 percent. Moreover, prices of pulses and cereals are rising and services inflation remains somewhat sticky.Inflation minus food, fuel: The prospects for inflation excluding food and fuel are more uncertain. It, however, remains to be seen the impact on the cost of funds for banks and how soon they start cutting rates.

Source: Economic Times August 09, 2016 07:01 UTC