RBI cuts repo rate by 25 bps to more than 6-1/2 year low

MUMBAI (Reuters) – The Reserve Bank of India (RBI) cut its policy rate on Wednesday by 25 basis points to 6 percent, the lowest since November 2010, as slumping inflation allowed the central bank to focus on boosting an economy growing at the slowest pace in over two years.

Forty of 56 economists polled by Reuters predicted the RBI would cut the repo rate by 25 bps – its first rate cut since one of the same size in October and the first easing move by a central bank in Asia since New Zealand in December.

The RBI also cut the reverse repo rate by 25 bps to 5.75 percent.

Four members of the monetary policy committee voted to cut rates by 25 bps, while one voted for a 50 bps cut and one voted for leaving rates unchanged.