Fri, 07 Feb 2025

Fri, 07 Feb 2025 India cuts interest rates for the first time in five years

The latest cut happens when India's GDP growth is seen slowing to a four-year-low of 6.7%.

* The Reserve Bank of India (RBI) has cut its repo rate from 6.5% to 6.25% to boost growth in the economy.
* This is the first interest rate cut in nearly five years and comes as India's GDP growth slows to a four-year low of 6.7%.
* RBI governor Sanjay Malhotra said the bank will keep its policy stance "neutral" and could consider further rate cuts to support growth.
* The rate cut could lead to lower mortgage and credit card interest rates, as well as cheaper borrowing costs for companies.
* The move follows a range of measures announced by the RBI to ease cash shortages in the economy, including injecting $18bn into the banking system.
* Economists expect the central bank to cut rates further by 0.5%-1% to support growth, but global uncertainties such as trade tensions and currency depreciation could complicate this task.
* India's currency, the rupee, is trading near record lows due to heavy foreign investor outflows from stock markets.
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