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RBI unexpectedly cut rates by half a percent
The Reserve Bank of India (RBI) unexpectedly cut interest rates by half a percent on Tuesday. The 50 basis point cut was more-than-expected and lowered the main interest rate to 6.75 percent in a bid to boost stuttering growth, with inflation well below its target level.
The RBI has already eased the policy rate by 75 bps so far this year.
The benchmark repo rate — the level at which it lends to commercial banks.
RBI governor Raghuram Rajan announced that the Cash Reserve Ratio, CRR, was unchanged at 4%.
A rate cut was being seen as a key trigger to boost investment demand in an economy where credit growth has dipped to a multi-year low.
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