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India’s New Central Bank Chief Delivers Election Cut for Modi

  • RBI cuts benchmark rate by 25bps, shifts to neutral stance
  • Inflation seen at 2.8% in final quarter of fiscal year
Updated on

India’s new central bank chief delivered an unexpected interest rate cut, providing Prime Minister Narendra Modi with the kind of stimulus he needs to stoke economic growth in an election year.

In a sharp reversal from October, when the Reserve Bank of India took rate cuts off the table, Governor Shaktikanta Das -- who took office in December -- opened the door to more policy easing and brought growth firmly back onto the Monetary Policy Committee’s agenda. That was a departure from his predecessor Urjit Patel, whose singular aim was to meet the RBI’s 4 percent inflation mandate.