India central bank cuts interest rate by 25 basis points

[MUMBAI] India's central bank lowered its policy repo rate by 25 basis points to 7.5 per cent on Wednesday, delivering its second cut this year on the back of easing inflation and a government commitment to fiscal discipline.

The Reserve Bank of India had lowered interest rates by 25 bps on Jan 15. Both rate cuts this year have took place outside of the central bank's scheduled policy review meetings.

The rate cut marks a vote of faith in the government, which on Saturday pledged to be fiscally responsible but said it would take an additional year to meet a fiscal deficit target of 3 per cent of gross domestic product.

REUTERS