The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points 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 surprised markets with a jumbo rate cut, seizing on cooling inflation to frontload monetary easing and bolster economic growth amid heightened global uncertainty.

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.