The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points (bps) on Friday, a third consecutive reduction, and slashed the reserve ratio for banks as muted inflation provided space for policymakers to focus on supporting economic growth.

India’s central bank delivered a larger-than-expected rate cut, as sound economic conditions at home and tariff risks abroad make a case for more policy easing.

On Friday, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the repo rate by 50 basis points (bps) to 5.5%, marking the third consecutive rate cut this year.