The ReserveBank of India cut policy rates amid an improving inflation outlook.

The central bank said Oct. 4 that it slashed the policy reporate under the liquidity adjustment facility by 25 basis points to 6.25% from6.5%. The reverse repo rate under the liquidity adjustment facility wasadjusted to 5.75% and the marginal standing facility rate and the bank rate to6.75%.

The central bank said the momentum of food inflation turnednegative in August, which then pulled down headline inflation to an intrayearlow. Fuel inflation has also moderated steadily through the year.

The RBI expects headline consumer price index inflation tomove toward 5% by March 2017.