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.

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.

RBI Governor Sanjay Malhotra's shift in policy stance, along with his statement that the RBI MPC will now carefully assess income data and the evolving economic outlook before deciding on further action,