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India CB Unexpectedly Cuts Key Interest Rate

India's central bank unexpectedly cut its key interest rate, after holding it steady in the previous two policy sessions, and changed the monetary policy stance to "neutral" from "calibrated tightening".

The Monetary Policy Committee decided to reduce the repo rate by 25 basis points to 6.25 percent with immediate effect, the Reserve Bank of India said in a statement on Thursday.

Economists had expected the rate to remain unchanged in the February policy session, which was the first chaired by the new RBI Governor Shaktikanta Das.

The policy-making body voted 4-2 to reduce the repo rate. Policymakers Chetan Ghate and Viral Acharya voted to keep the rate unchanged.

The decision to change the monetary policy stance was unanimous, the bank said.

The MPC reiterated its commitment to achieving the medium-term target for headline inflation of 4 percent.

The minutes of the latest policy session will be released by February 21. The next rate-setting session is scheduled from April 2 to 4.

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