The Reserve Bank of India (RBI) cut its repo rate by 50 basis points to 6.75%, while keeping the cash reserve ratio (CRR) unchanged at 4%. This is the fourth rate cut since January. The central bank has also cut the FY16 gross domestic product (GDP) growth target to 7.4% from 7.6% earlier.

After the fourth bi-monthly monetary policy for fiscal 2015-16, the repo rate, or the rate at which the central bank infuses liquidity in the system, stands at 6.75%. Reverse repo rate, or the rate at which liquidity gets drained out from the banking system, has been adjusted to 5.75%.

The RBI had previously cut interest rates three times this year, lowering it by 25 basis points each time.

The RBI justified the bigger reduction, saying consumer inflation was likely be running at 5.8 percent, below the 6 percent target for January. At the same time the central bank cut its economic growth forecast to only 7.4 percent in the fiscal year ending in March 2016, lower than its previous 7.6 percent projection.

This is the biggest single monetary policy move taken by Rajan and it takes the repo to its lowest since March 2011. Since taking the helm of the central bank in September 2013, Rajan has raised the repo rate three times and lowered it three times, all by a magnitude of 25 bps.