India’s central bank cuts lending rate to 6%

NEW DELHI – India’s central bank has lowered its key interest rate by a quarter of a percentage point to 6% to strengthen domestic growth ahead of a national election next week.

The interest rate is what the federal bank charges on lending to commercial banks. Lower interest rates help borrowers.

The rate cut comes amid a deterioration in the outlook for regional and global growth.

In a bimonthly review of the economy released on Thursday, the Reserve Bank of India cut the retail inflation forecast to 2.9-3% for the first half of this fiscal year. It cited lower food and fuel prices and expectations for a normal rainy season.

In its February policy statement, the RBI had projected retail inflation at between 3.2-3.4%.

India’s financial year runs from April-March.