INFLATION India's central bank cuts key repo rate

The Reserve Bank of India (RBI) lowered its key repo rate yesterday for a second consecutive quarter and changed its monetary policy stance easing, calling room for more cuts ahead, as it seeks to boost the sluggish economy in the face of fresh US tariffs.

- SWATI BHAT SUDIPTO GANGULY

India became the second central bank after the Reserve Bank of New Zealand to cut interest rates since the wide-ranging levies were announced.

The tariffs have raised the risk of a global slowdown and a US recession while sparking financial turmoil, forcing a range of central banks facing a tough choice between cutting rates to support growth and shoring up their fragile currencies.

India's Monetary Policy Commit-tee (MPC), which consists of the RBI and three external members, cut the repo rate by 25 basis points to 6.00% as expected. It started reducing rates with a quarter-point reduction in February, but cut rates again in May 2019. The central bank also changed its stance to "accommodative" from "neutral".

The 26% tariffs announced by the US on imports from India have exac-erbated uncertainties, but quantifying the impact on growth is little, said central bank Governor Sanjay Malhotra in his statement.