India’s central bank cut interest rates for the second time this year to revive investment and bolster the weakest economic growth in a decade, while saying the scope for further monetary easing remains limited.
Governor Duvvuri Subbarao lowered the repurchase rate to 7.5 percent from 7.75 percent, the Reserve Bank of India said in Mumbai today. Thirty of 35 analysts in a Bloomberg News survey predicted the move and the rest forecast no change.
Finance Minister Palaniappan Chidambaram last week called for cheaper borrowing costs after his budget targeted the narrowest fiscal deficit in six years to help damp price pressures. The window for further rate cuts may close unless consumer inflation of almost 11 percent and a record current- account gap abate, according to Deutsche Bank AG.
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