India’s central bank, the Reserve Bank of India has continued the global central bank trend of cutting rates, slashing the country’s base interest rate from 6.75% to 6.5%. That’s the lowest its been since 2011.
The cut is the fifth by the bank since the start of 2015, and had been widely expected by economists, but still adds to the huge number of cuts in interest rates since the financial crisis.
Last week, a chart from JP Morgan Asset Management’s Alex Dryden, first reported by the Financial Times, showed that central banks have cut more than 650 times since 2008. Amongst the latest nations to cut are Norway, which dropped rates to just 0.5% in March, and said it could negative.
Speaking about the cut, the RBI’s governor Raghuram Rajan left room for more cuts in the country’s rate, saying:
The stance of monetary policy will remain accommodative. The Reserve Bank will continue to watch macroeconomic and financial developments in the months ahead with a view to responding with further policy action as space opens up.
At the same time as the announcement of the central rate cut, the RBI also left its cash reserve rate unchanged at 4%, and upped its reverse repo rate to 6% from 5.75%.
Earlier on Tuesday, Australia’s Reserve Bank left its base rate unchanged at 2%.