NEW DELHI (AP) – India’s central bank on Tuesday cut its key interest rate by half a percentage point, aiming to spur economic growth as inflation cooled to the lowest since November.
The reduction in the repo rate to 6.75 percent was the fourth rate cut this year.
Industry groups were pressing for an interest rate cut to boost economic growth after the inflation rate fell to 3.6 per cent in August. But the size of Tuesday’s cut was bigger than most economists had forecast.
Reserve Bank of India governor Raghuram Rajan also lowered India’s growth forecast for the fiscal year ending March 2016 to 7.4 percent from 7.6 per cent.
The central bank cut the policy rate by a quarter point in each of January, February and June as falls in commodity prices reduced inflation, giving it more scope to stimulate Asia’s third-largest economy.