India central bank cuts rates

India’s central bank cut interest rates yesterday ahead of general elections due this year. The Reserve Bank of India (RBI) said the benchmark repo rate -- the level at which it lends to commercial banks -- would be reduced by 25 basis points to 6.25 per cent.

It marked the first interest rate decision under new bank chief Shaktikanta Das, who was appointed in December after his predecessor, Urjit Patel, quit following a public spat with the administration. On Wednesday, a key economic advisor to Modi called on the RBI to slice rates to help boost consumption and investment.

Rajiv Kumar, vice chairman of government thinktank NITI Aayog, said the bank should act to help spur “higher growth rates”. Data showed the economy expanded 7.1pc on-year in July-September, down from 8.2pc in the previous quarter. The RBI raised rates twice last year over concerns about inflation.