RBI says monsoon outcome is 'biggest uncertainty'

Reserve Bank of India (RBI) Governor Raghuram Rajan says the biggest uncertainty ahead is the outcome of the annual monsoon, after the rains missed their normal start date, along with subsequent government action.

"Each path of the sequence is fraught with uncertainty. So we need to figure out how this plays out. And, clearly government action is very important," Rajan said after the central bank's policy meeting on Tuesday.

The central bank on Tuesday cut key rates by 25 basis points. The repo rate now stands at 7.25 per cent and reverse repo rate at 6.25 per cent.

RBI, however, left the cash reserve ratio and statutory liquidity ratio unchanged at 4 per cent and 21.5 per cent, respectively.

- With inputs from Reuters