Swati Bhat

A sharp slowdown in India's manufacturing sector - a key driver of job creation - was a major factor in the monetary policy committee's (MPC) decision to cut the key repo rate earlier this month, an external member told Reuters.

The Reserve Bank of India seeks to boost the sluggish economy and sees inflation easing towards its 4% target.

India is expected to cut interest rates for the first time in nearly five years on Friday to provide stimulus to its sluggish economy, with easing price pressures giving policymakers more room to manoeuvre.

India's central bank is widely expected to cut interest rates for the first time in nearly five years in Governor Sanjay Malhotra's first monetary policy review on Friday, aiming to boost economic growth which is seen falling to a four-year low.

The Indian government on Saturday announced the biggest tax relief in at least a decade to boost consumer demand to revive growth in the world's fifth-largest economy, giving a huge relief to millions of households grappling with high inflation.

A large fire broke out at a Hindu religious festival, the Maha Kumbh Mela, in the northern Indian state of Uttar Pradesh on Sunday, but the blaze was quickly brought under control and no injuries were reported, officials said.

To encourage the use of the rupee and other currencies to settle cross-border transactions, India's central bank took steps to further liberalise regulations under the foreign exchange management act, it said in a release on Thursday.

Some analysts are pushing back expectations for interest rate cuts in India as the rupee's slump to record lows fans worries about inflation, even as growth in Asia's third-largest economy slows.

India's growth trajectory is expected to pick up in the second half of 2024-25, driven by domestic private consumption and a sustained revival of rural demand, the central bank said in its monthly bulletin released on Tuesday.

Restoring a balance between inflation and growth in India remains an important task for the Reserve Bank of India, the outgoing central bank governor, Shaktikanta Das, said.