RBI’s repo rate cut was almost a fait accompli with the inflation outlook continuing to be benign for some time and a few leading indicators signalling a growth slowdown. Since last month the RBI had started creating conditions for effective transmission of a rate cut by injecting liquidity in the banking system by way of dollar swaps. Even before that the US Fed’s U-turn from hawkish to dovish stance in late January had helped to create scope for a back to back repo rate cut by the RBI. The reduced repo rate will enable the rupee to depreciate and help export sectors and job growth. As for the inflation target, what is often forgotten is that the original notification introducing the inflation targeting regime in 2016 clearly mentioned that the target is to be pursued over the course of the business cycle. It means that inflation need not be maintained at 4% every month but should be within the permissible range allowing the target to be met on an average in the medium to long run. Under governor Das the RBI seems to be returning to this original mandate which allows scope for supporting growth in the short term.