On 29 September the Reserve Bank of India (RBI) cut its key policy repo rate by 50bp to 6.75%. While the rate cut was expected, its size – 50bp rather than the usual, more pedestrian 25bp – is surprising. In our view, the RBI took advantage of the favourable inflation outlook to ‘front-load’ a rate cut and help accelerate the Indian economic recovery in a context of slowing global growth.
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Reserve Bank of India ‘front-loads’ a rate cut to accelerate economic recovery
