India central bank lowers key policy repo rate by 25 bps to 7.5%

Mumbai

INDIAN government bonds surged to their highest in nearly 20 months, while the rupee jumped to a one-month high on Wednesday after the central bank lowered interest rates, in a move that came earlier than expected.

India's central bank lowered its key policy repo rate by 25 basis points to 7.5 per cent, its second inter-meeting cut this year on the back of easing inflation and what it said was the "weak state" of parts of the economy.

The move was also seen as backing the government's budget unveiled on Saturday, which pledged fiscal responsibility but delayed meeting a fiscal deficit targ…