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POST TIME: 3 August, 2017 00:00 00 AM
India cuts rates by 25 basis points
AFP

India cuts rates by 25 basis points

AFP, MUMBAI: India’s central bank yesterday cut interest rates for the first time in almost a year, responding to a slowing economy and record low inflation.

The Reserve Bank of India said the benchmark repo rate—the level at which it lends to commercial banks—would be cut by 25 basis points to 6 per cent, a near seven-year low.

The cut was predicted by 41 of 57 economists polled by Bloomberg News, with the rest anticipating no change.

The interest rate last sat at 6 per cent in September 2010.

Finance Minister Arun Jaitley in June called for a reduction in the rate following a sharp fall in inflation in the world’s fastest-growing major economy. Retail inflation for June came in at 1.54 per cent, down from 2.18 per cent in May and the lowest since the government started tracking it in 2012. New Delhi has kept an inflation target of 4 per cent, with room for a 2 per cent increase or decrease. The June data was the first time the lower end of that band has been breached, experts said.