MUMBAI: Rating agency Icra has said it expects Reserve Bank of India (RBI) Governor Raghuram Rajan to hold key rates in monetary policy statement due on April 1, as inflation in the country has shown considerable signs of cooling and is sniffing at the desired levels now.

"Consumer inflation eased to 8.1 per cent, close to the target of 8 per cent for the end of this calendar year as suggested by the Urjit Patel committee...Therefore, we expect a status quo on the policy rate in the upcoming policy review," it said in a note.

Unseasonal rains and hailstorms witnessed early March, which may put pressure on the inflation front, will not immediately have a bearing on the monetary policy, the rating agency said.

There are also fears about a poor monsoon which can have a negative impact on the inflation trajectory, it added.

"At this stage, these concerns may be premature to necessitate a monetary response and instead warrant action from various levels of government in terms of preparedness to deal with the eventuality of an unfavourable monsoon."

Mr Rajan, who took charge as Governor of the apex bank last September, raised the rates at his first policy announcement, rightly foreseeing a pressure on the inflation front. He increased it again for a third  time since he took charge in January when the market was expecting a pause.

It can be noted that even though the RBI has not formally adopted inflation targeting, it has gone public on targeting consumer price inflation down to 8 per cent by January 2015 and further down to 6 per cent by January 2016, as per the recommendations of the Patel committee.