India central bank cuts interest rate

India's central bank unexpectedly cut interest rates for the sixth time in as many months after forecasting slower economic growth this year.

Governor Duvvuri Subbarao lowered the reverse repurchase rate to 3.25 percent from 3.5 percent, according to a statement in Mumbai yesterday. The economy may expand 6 percent in the year to March 31, the slowest pace since 2003, the central bank said.

The Reserve Bank of India is aiming to push commercial lenders to lower borrowing costs and step up credit to withstand the headwinds of a global recession. The absence of a fiscal stimulus until at least June, when India's new government takes office, may have also prompted the bank to cut rates to support economic growth.