India’s Monetary Policy Committee on Thursday decided to cut its benchmark repo rate by 25 basis points to 6.25 percent in response to lower-than-expected retail inflation. The committee also changed the policy stance to ‘neutral’ from ‘calibrated tightening’ and indicated that there may be scope of more rate cuts.

RBI Governor Shatikanta Das, who chaired his first MPC meet this time, said that the RBI Act mandates that the committee focus on growth after meeting its objective of inflation. With headline inflation expected to remain below the mid-point of the MPC’s target of 4 (+/-2) percent, the committee believes that room has opened up for lower rates.