Indian central bank cuts interest rate

By Riyaz ul Khaliq

ANKARA (AA) - The Indian central bank on Thursday announced a significant interest rate cut in the last 18 months.

The decision comes ahead of general elections slated for April-May when the ruling right wing Bharatiya Janata Party (BJP) will seek a second term.

The monetary policy committee of the Reserve Bank of India held a maiden meeting under recently-appointed Governor Shaktikanta Das.

“[The interest rate cut] may make home and other loans cheaper,” the Press Trust of India said in a report from Mumbai, India’s financial capital.

The rate cut is expected to “help boost lending and support the government's efforts to boost a slowing economy”.

The repo rate was cut by 25 basis points to 6.25 percent as inflation continues to remain benign.

India’s last rate cut to 6 percent was in August 2017.

The market experienced a slowdown in inflation which fell to an 18-month low of 2.19 percent last December, the report added.

Das’ appointment was made last December after former chief Urjit Patel quit amid a debate over central bank's autonomy.

Last week, the ruling BJP in its “interim” budget doled out cash to farmers and tax cuts to middle-class families.