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India cuts key lending rate by 25 basis points

Xinhua, April 5, 2016 Adjust font size:

India's central bank cut its key lending rate by 25 basis points on Tuesday amid strengthening of the government's fiscal control.

The repurchase rate, or the short-term lending rate for commercial banks on loans taken from the central bank, was lowered to 6.5 percent from 6.75 percent.

Meanwhile, the reverse repurchase rate, or the short-term borrowing rate, has been adjusted upward to 6 percent from 5.75 percent.

The changes were carried out in the monetary policy for the current fiscal year announced by Reserve Bank of India Governor Raghuram Rajan in Mumbai.

The central bank cut its short-term lending rate in September 2015 by 50 basis points to 6.75 percent. Cumulatively, 2015 saw the monetary authority cut the repo rate by 1.25 percent.

Indian Financial Minister Arun Jaitley said Monday the central bank needs to cut interest rate to stimulate growth. Endit