{"id":109898,"date":"2025-02-07T09:03:11","date_gmt":"2025-02-07T09:03:11","guid":{"rendered":"https:\/\/chezaspin.com\/blog\/index.php\/2025\/02\/07\/india-cuts-interest-rates-for-the-first-time-in-five-years\/"},"modified":"2025-02-07T09:03:11","modified_gmt":"2025-02-07T09:03:11","slug":"india-cuts-interest-rates-for-the-first-time-in-five-years","status":"publish","type":"post","link":"https:\/\/chezaspin.com\/blog\/india-cuts-interest-rates-for-the-first-time-in-five-years\/","title":{"rendered":"India cuts interest rates for the first time in five years"},"content":{"rendered":"

India\u2019s central bank has cut interest rates for the first time in nearly five years to counter slowing growth in Asia\u2019s third largest economy.<\/strong><\/p>\n

The Reserve Bank of India (RBI) reduced its repo rate from 6.5% to 6.25%, in line with the expectations of many economists.<\/p>\n

The repo rate is the level at which the central bank lends to commercial banks.<\/p>\n

The latest cut happens when India\u2019s GDP growth is seen slowing to a four year low of 6.7%.<\/p>\n

RBI governor Sanjay Malhotra said the bank was keeping its policy stance \u201cneutral\u201d, which would open more space to support growth, signalling further rate cuts.<\/p>\n

Investment growth and urban consumption in the world\u2019s fastest growing major economy have been flagging. Corporate profits have also shrunk in the first half of this financial year.<\/p>\n

But moderating inflation, an increase in rural demand and good agricultural output will help growth, said Mr Malhotra.<\/p>\n

The rate cut could lead to marginally lower mortgage and credit card interest rates as well as cheaper borrowing costs for companies.<\/p>\n

The central bank\u2019s rate reduction follows a range of measures previously announced, including an injection of $18bn (\u00a314.48bn) into the domestic banking system, to ease a cash shortage in the economy.<\/p>\n

It had also cut the cash reserve ratio \u2013 or the reserves commercial banks need to maintain with the RBI \u2013 by half a percent in December.<\/p>\n

The RBI\u2019s rate move follows the Union Budget\u2019s $12bn tax cut for the struggling middle class.<\/p>\n

Despite this, Mr Modi\u2019s government aims to curb spending to reduce the budget deficit. With limited room for fiscal stimulus, economists expect the central bank to cut rates further by 0.5% \u20131% to support growth, according to various estimates.<\/p>\n

However, global uncertainties due to US President Donald Trump\u2019s tariff war, an outflow of foreign investor money and a depreciating currency \u2013 which could further weaken if rates come down \u2013 have complicated the RBI\u2019s task.<\/p>\n

The Indian rupee is trading near record lows due to heavy foreign investor outflows from stock markets in recent months.<\/p>\n

The post India cuts interest rates for the first time in five years<\/a> first appeared on KBC<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

India\u2019s central bank has cut interest rates for the first time in nearly five years to counter slowing growth in Asia\u2019s third largest economy. The Reserve Bank of India (RBI) reduced its repo rate from 6.5% to 6.25%, in line with the expectations of many economists. The repo rate is the level at which the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-109898","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/109898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=109898"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/109898\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=109898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=109898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=109898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}