Reserve Bank of India surprises with early rate cut

Friday, 16 January 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The Reserve Bank of India (RBI) cut interest rates on Thursday by 25 basis points to 7.75% in a surprise inter-meeting cut, yielding to growing signs of slowing inflation and a flagging recovery.

India’s Finance Minister Arun Jaitley (left) speaks to Reserve Bank of India (RBI) Governor Raghuram Rajan during a convocation ceremony for students at a university in Mumbai, India, 9 January 2015 – REUTERS The wholesale price index for December, released on Wednesday, rose just 0.11% year-on-year compared with a 0.6% jump forecast by economists in a Reuters poll. Wholesale prices were unchanged in November. In a statement, the RBI cited lower-than-expected inflation, weak crude prices and weak demand, as well as the government’s commitment to sticking to a fiscal deficit target. “These developments have provided headroom for a shift in the monetary policy stance,” it said.