MUMBAI, March 19 (Xinhua) -- Indian central bank Reserve Bank of India (RBI) announced Tuesday to cut repo rate, the key rate by 25 basis points (bps) to 7.5 percent, while keeping cash reserve ratio unchanged.
In its mid-quarter policy review, RBI decided to cut the repo rate to help revive stagnant Indian economy, but it kept cash reserve ratio unchanged, which is in line with most economists' expectations.
This is the second time RBI cut interest rate in 2013. In January, RBI also cut repo rate 25 bps to 7.75 percent.
"Even as the policy stance emphasis addressing the growth risks, the headline for further monetary easing remains quite limited," the RBI said in its statement.
Indian economy growth slows down in the recent two fiscal years. It is expected to grow a decade low 5 percent in the fiscal year ending this month.
However, high inflation limits the room for RBI to use rate cutting as a instrument to stimulate economy. According to latest official statistics, India's wholesale price index (WPI) rose a faster-than-expected 6.84 percent in February.
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