The apex bank said that since the last rate cut, global macro-economic indicators have deterioratedm and that the headline inflation numbers are far above the comfort range.
"Since the RBI's annual policy statement in April, global macro-economic and financial conditions have deteriorated. At the same time, the domestic macro-economic situation too raises several deepening concerns," the apex bank said in a statement.
"While growth in 2011-12 has moderated significantly, headline inflation remains above levels consistent with sustainable growth. Importantly, retail inflation is also on an uptrend," RBI stated.
In April, Governor Duvvuri Subbarao had cut re-purchase rate by 50 basis points to eight percent, which automatically impacted the reverse repurchase rate, which dropped to seven percent from 7.5 percent.