The Reserve Bank of India (RBI) on Thursday surprised markets by cutting its key interest rate, in a bid to spur growth in Asia’s third-largest economy and on the back of evidence that inflation has slowed.
The central bank cut its key repo rate by 25 basis points to 7.75 percent, its first cut since March 2013. The RBI was not scheduled to meet on monetary policy until February 3.
The move comes a day after government data showed wholesale price inflation in December rising 0.11 percent from the year-ago period, much lower than the 0.6 percent rise forecast by economists, on the back of plunging oil prices and stabilizing food costs.
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