MUMBAI, April 17 (Reuters) - The Reserve Bank of India cut its repo rate by 50 basis points (bps) on Tuesday and not by 25 bps as widely expected, because it has a better understanding of growth and inflation than during the March policy, Governor Duvvuri Subbarao said.
He said a bigger cut in the key interest rate would ensure more effective monetary policy transmission.
The wholesale price index, India’s main inflation indicator, rose an annual 6.89 percent in March, higher than 6.70 percent rise estimated by analysts, but lower than 6.95 percent in February.
The country’s industrial output rose a much slower-than-expected 4.1 percent in February from a year earlier, recent data showed. (Reporting by Neha Dasgupta; Editing by Rajesh Pandathil)