India central bank cuts interest rate to the lowest since 2011
RBI may cut rates further later this year if inflation trends stay benign
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INDIA'S central bank cut its policy interest rate by 25 basis points (bps) to 6.50 per cent on Tuesday, reducing it to a more than five-year low while dangling the prospect of another cut later this year if inflation trends stay benign.
Having been frustrated by commercial banks' reluctance to lower interest rates for borrowers in the past, Reserve Bank of India (RBI) governor Raghuram Rajan voiced confidence in making them take heed this time. "Borrowing rates are coming down significantly in this economy," Dr Rajan told a news conference following the policy review. "My hope is that we will see significantly more transmission over the next few months."
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