India Rate Cut Eclipsed as Singh Ally Quits Coalition
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The Indian central bank’s second interest-rate cut this year to spur growth was overshadowed by political drama as a key ally withdrew support for the coalition government, imperiling a push for reforms to revive investment.
The Dravida Munnetra Kazhagam, the largest ally, said today it would stop support for Prime Minister Manmohan Singh’s administration. The Reserve Bank of India in Mumbai lowered the repurchase rate to 7.5 percent from 7.75 percent, as predicted by 30 of 35 analysts in a Bloomberg News survey.