The Reserve Bank of India cut its key interest rate by half a percentage point, delivering a bigger than expected move to support the economy as concerns ease over inflation.
The central bank cut on Friday lowered the benchmark repo rate to 5.5 per cent. Economists’ consensus forecasts were for a 0.25 per cent cut. It means the bank has now reduced its benchmark rate measure by 1 per cent this year over three consecutive meetings.
Governor Sanjay Malhotra said that the central bank was “frontloading” rate cuts to drive economic growth as it lowered its annual inflation forecast to 3.7 per cent from 4 per cent.
“As the global environment remains uncertain it becomes even more important to focus on domestic growth amidst sustained price stability,” Malhotra said.
“Accordingly, today’s monetary policy actions can be seen as a step towards propelling growth to a higher aspirational trajectory.”
Central banks around the world are wrestling with the turmoil caused by US President Donald Trump’s seesawing tariff threats, with the European Central Bank on Thursday signalling that it is nearing the end of its rate-cutting cycle in response to that uncertainty.
This is a developing story