India Just Cut Interest Rates

India’s Reserve Bank Governor Raghuram Rajan (L) speaks with India’s Finance Minister Palaniappam Chidanbarum. Image: Getty.

India’s central bank just surprised markets by cutting interest rates by 25 basis points to 7.75%.

The Reserve Bank of India wasn’t due to meet on monetary policy until February 3.

The decision to cut rates was made in an effort to promote growth on the back of evidence inflation had slowed.

Earlier this week the Indian government revealed wholesale price inflation for December rose 0.11%, well below the 0.6% forecast by economists.

The RBI pointed to lower inflation, weaker oil prices and falling demand as the reasons for its decision.

“These developments have provided headroom for a shift in the monetary policy stance,” Reserve Bank of India Governor Raghuram Rajan said in a statement.

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