India cuts interest rates to five-year low
India’s central bank has cut its key interest rate for the first time this year.
The Reserve Bank of India (RBI) reduced its repo rate to 6.5% from 6.75%, in line with the expectations of many economists.
The repo rate is the level at which the central bank lends to commercial banks.
The latest cut takes interest rates in the country to the lowest level in five years. The RBI cited a fall in inflation for the latest cut.
“Retail inflation measured by the consumer price index (CPI) dropped sharply in February after rising for six consecutive months,” said Raghuram Rajan, India’s central bank governor. The drop came largely from a bigger-than-anticipated fall in vegetable prices.