MOSCOW, January 15 (Sputnik) — The Reserve Bank of India announced Thursday it is cutting its key interest rate from 8 to 7.75 percent in order to stimulate economic growth, the bank's governor, Raghuram Rajan, said in a statement.
“Inflation outcomes have fallen significantly below the 8 percent targeted by January 2015. On current policy settings, inflation is likely to be below 6 percent by January 2016. These developments have provided headroom for a shift in the monetary policy stance,” the statement reads.
The interest rate cut matches the policies of the Prime Minister Narendra Modi’s government, who has instituted reforms aimed at stimulating economic growth and attracting foreign direct investment. Revitalizing the economy and creating more jobs for India's growing population was one of Modi’s campaign pledges that enabled his Bharatiya Janata party to win the general elections in May 2014.