The Reserve Bank of India cut its repo rate by 25bps on Friday, delivering the widely expected move as record-low retail inflation and a benign price outlook gave policymakers space to extend support for growth.
The decision brings the total easing since February to 125bps, taking the repo rate to 5.25% after pauses in August and October.
Alongside the rate cut, the RBI announced measures to ease liquidity, reinforcing the policy stance. Officials left the door open for further easing, with markets viewing another 25bp cut as possible if inflation stays contained. Many economists now see a terminal rate near 5.00%, after which the central bank is likely to hold for an extended period.
