India’s central bank delivered an outsized cut to its benchmark policy rate, bringing it to 5.5% from 6%, its lowest level since August 2022.
This also marks a third straight rate cut since February, and comes below the median estimates of 5.75% in a Reuters poll.
RBI Governor Sanjay Malhotra said in a livestream that the move was taken as inflation had significantly softened, and growth has been “lower than our aspirations amidst a challenging global environment and heightened uncertainty.”
The decision came after a better-than-expected GDP growth figure in its fiscal fourth quarter, with the economy expanding 7.4% year-on-year compared to the 6.7% estimated by economists polled by Reuters.
However, the central bank held its full-year GDP estimate at 6.5%, marking a sharp slowdown compared to the 9.2% seen in the previous financial year, which ended in March.
