The Reserve Bank of India (RBI) Thursday cut the repo rate at which it lends to commercial banks by 25 basis point from 8 percent to 7.75 percent with immediate effect.
The move came a day after wholesale inflation data for December showed it had fallen to 0.11 percent in December 2014 from 6.40 percent in the corresponding month of 2013.
The cash reserve ratio (CRR) and reverse repo rate were left unchanged.