Indian central bank surprises with bigger-than-forecast rate cut

Mumbai

INDIAN central bank governor Raghuram Rajan built on his record of surprises with policy decisions on Tuesday, taking advantage of a rout in commodity prices to lower borrowing costs by more than forecast.

Mr Rajan, who unleashed emergency measures to prop up the rupee days after he took office and began this year with two unscheduled interest rate cuts, lowered the benchmark repurchase rate by half a percentage point, to 6.75 per cent. Most of the 52 economists surveyed by Bloomberg had predicted a quarter-point move, and just one made the right call.