India’s central bank has lowered its key interest rate by a quarter of a percentage point to 6.0 per cent to strengthen domestic growth ahead of a national election next week.
The interest rate is what the federal bank charges on lending to commercial banks. Lower interest rates help borrowers.
The rate cut comes amid a deterioration in the outlook for regional and global growth, reports AP.
In a bimonthly review of the economy released on Thursday, the Reserve Bank of India cut the retail inflation forecast to 2.9-3.0 per cent for the first half of this fiscal year. It cited lower food and fuel prices and expectations for a normal rainy season.
In its February policy statement, the RBI had projected retail inflation at between 3.2-3.4 per cent.
India’s financial year runs from April-March.