The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points on Friday and slashed the reserve ratio for banks as low inflation gave policymakers room to focus on supporting growth amid a volatile global economy.

India's central bank has lowered interest rates by a deeper-than-expected half a percent - the third cut in a row amid falling inflation and lower growth in Asia's third largest economy. The repo rate now stands at 5.

India retained its FY2025-26 GDP growth forecast at 6.5% amid global uncertainty. The RBI cut interest rates to 5.75% to spur growth. Despite Q4 GDP rising 7.4%, FY25 saw the slowest growth since COVID.