The central bank at the same time changed its monetary policy stance to neutral from accommodative, signalling the room for more easing is limited.
India’s central bank cut interest rates more than projected and unexpectedly reduced the cash reserve ratio for banks, providing a major liquidity boost to the economy as growth prospects dim and inflation subsides.
The Reserve Bank of India’s six-member monetary policy committee, headed by Governor Sanjay Malhotra, voted five to one to lower the benchmark repurchase rate by 50 basis points to 5.5%. State Bank of India’s Soumya Kanti Ghosh was the only economist among those surveyed by Bloomberg to predict the move.
