NEW DELHI (AP) — India's central bank has cuts its key interest rate by a quarter of a percentage point, raising hopes of lower borrowing costs for households as inflation ebbs.
The announcement by the Reserve Bank of India on Wednesday reduced its repo rate to 6 percent. This is the rate at which the central bank lends to commercial banks.
India's inflation rate declined to a record low of 1.54 percent in June, while the annual rate of growth in factory output fell to 1.7 percent in May from 8 percent a year earlier.
Most industrial groups had been pushing for an interest rate cut to help boost the economy by lowering the cost of borrowing.