Rajan Relents With Rate Cut on Inflation Slide; Stocks Jump
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The Reserve Bank of India cut the benchmark interest rate in an unscheduled move after a slowdown in inflation offered scope to buttress an economy expanding at little more than half the pace of four years ago.
Stocks, bonds and the rupee surged after Governor Raghuram Rajan lowered the repurchase rate to 7.75 percent from 8 percent, the first reduction in 20 months. The move set India apart from BRIC counterparts Russia and Brazil, which have boosted rates after currency declines that spurred inflation.