The
central bank cut its key repo rate by 25 basis points to 7.25%, as widely
expected, after taking similar moves in January and March this year.
The
repo rate is the level at which the central bank lends to commercial banks.
The
cut comes despite India becoming the world's fastest-growing major economy,
beating China recently.
The
Indian economy grew by 7.5% in the January to March period, and 7.4% according
to recent data, compared with a year ago, outstripping the 7% figure for the
world's second largest economy.
China
has also cut interest rates three times in the past six months.
But
analysts have pointed to other Indian economic indicators which show soft
patches in the economy.
Other
data released on Tuesday - such as the MNI consumer sentiment indicator - fell
by 2% in May from April, showing that consumers were less optimistic about the
economy.
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