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India's new policy panel cuts rates at governor's first review

Urjit Patel, governor of the Reserve Bank of India.
Indranil Bhoumik | Mint | Getty Images

India's newly-minted monetary policy committee delivered a surprise 25-basis-point cut in the repo rate to 6.25 percent on Tuesday, as Reserve Bank of India Governor Urjit Patel presided over his first policy review since his appointment last month.

The repo policy rate is now at its lowest since November 2010. The RBI did not provide a breakdown of how the six members of the monetary policy committee voted.

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Analysts had braced for a close vote. About 40 percent of analysts polled by Reuters had forecast a cut, while 60 percent had expected the central bank to keep the repo rate unchanged.

The MPC was introduced to make decision-making more transparent and more collegiate. Hitherto, the RBI governor had taken sole responsibility for deciding rates. The governor still gets a deciding vote if the panel is evenly split.

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