India’s central bank has slashed interest rates for the first time in nearly five years to combat weakening growth in Asia’s third largest economy.
The Reserve Bank of India (RBI) decreased its repo rate from 6.5% to 6.25%, as expected by many experts.
The repo rate is the rate at which the central bank loans to commercial banks.
The latest drop comes as India’s GDP growth is expected to slump to a four-year low of 6.7%.
RBI Governor Sanjay Malhotra stated that the bank’s monetary stance would remain “neutral,” allowing for more room to assist growth and foreshadowing more rate decreases.
Investment growth and urban consumption in the world’s fastest-growing major economy have slowed. Corporate profits have also declined in the first half of the fiscal year.
However, Mr. Malhotra believes that moderate inflation, increased rural consumption, and strong agricultural output would all contribute to growth.
The rate drop could result in somewhat reduced mortgage and credit card interest rates, as well as lower borrowing costs for businesses.
The central bank’s rate cut comes after a series of previously announced measures, including an infusion of $18 billion (£14.48 billion) into the domestic banking system to alleviate the economy’s cash crisis.
It also reduced the cash reserve ratio, or the reserves commercial banks must hold with the RBI, by half a percent in December.
The RBI’s rate decision comes after the Union Budget’s $12 billion tax cut for the struggling middle class.
Despite this, Mr. Modi’s government intends to cut spending to lower the budget deficit. With little opportunity for fiscal stimulus, experts expect the central bank will slash interest rates by 0.5% to 1% to boost GDP, according to various estimates.
However, global concerns caused by US President Donald Trump’s tariff battle, an exodus of foreign investor money, and a falling currency—which may weaken much more if interest rates are cut—have compounded the RBI’s mission.
The Indian rupee is trading near record lows as a result of recent foreign investor outflows from the stock market.
![Rev. Fr. Anthony Odiong, a US-based Nigerian Louisiana Catholic priest, was arrested in Florida on Tuesday for possessing child pornography, according to law authorities. The suspect is reportedly accused of many other cases of sexual assault. The Waco, Texas, Police Department announced in a Facebook post on Tuesday that officers detained Father Anthony Odiong in Ave Maria, Florida, with assistance from the United States Marshals Service. Waco police announced in March that they had received "credible information" about a sexual assault allegedly committed by Odiong in Texas in 2012. “During the subsequent investigation, a case of possession of child pornography was uncovered,” the police said. The priest was apprehended in Florida by the Caribbean Regional Fugitive Task Force. The Waco Police Department said that he will be extradited to Texas. Odiong had previously served in the Archdiocese of New Orleans before being removed as priest in December of last year due to controversy over homilies in which he claimed, among other things, that the Catholic Church was being taken over by "the gays." At the time, the priest was also accused of abusive behaviour; a Louisiana lady claimed in U.S. bankruptcy court that Odiong had committed both financial and sexual abuse against her. Prior to joining the New Orleans Archdiocese, Odiong served in at least two Texas parishes. On Tuesday, Waco police stated that during their sexual assault investigation, "the presence of other survivors was revealed." “Multiple women have come forward to tell similar experiences as the sexual assault survivor who reported the initial allegation,” the police department said. “Survivors’ experiences ranged from sexual assault and indecent assault, more commonly recognised as groping, and financial abuse, with some survivors experiencing every element of Anthony Odiong’s manipulation.” The police said they “believe there may be more survivors, and we wish to speak with anyone who [has] had similar encounters” with the priest. The Archdiocese of New Orleans issued a brief news release on Tuesday noting Odiong's arrest in Florida. The archdiocese “encourages anyone with any information to contact law enforcement,” the release said.](https://chronicle.ng/wp-content/uploads/2024/08/ezgif-6-4730550ede-450x300.jpg "Odiong: US-based Nigerian Catholic priest convicted over sexual assault")