Mumbai - India's central bank lowered its policy repo rate by 25 basis points to 7.5% on Wednesday, its second inter-meeting cut this year on the back of easing inflation and what it said was the "weak state" of parts of the economy.
Although markets had broadly expected the Reserve Bank of India to cut rates again after its surprise January easing, few had expected a move as early as this week, just days after the government presented its annual budget for the coming fiscal year.
"Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action to utilise available space for monetary accommodation," RBI Governor Raghuram Rajan said in a statement.