Mumbai Sensex closes down as India cuts interest rates

<p>The Mumbai Sensex has closed down today, as India’s central bank has slashed its interest rates.</p>

India's key benchmark has closed lower after the country's central bank lowered its key interest rate by a quarter of a percentage point.

The Reserve Bank of India (RBI) cut the rate from eight per cent to 7.75 per cent in a bid to revive growth.

This is the first time in nine months the RBI has taken such action, as the subcontinental nation grapples with its economic slowdown.

India's growth has fallen to a three-year nadir and the central bank has been under a great deal of pressure to stimulate the economy, with both businesses and the government urging the institution to lessen the cost of borrowing.

The RBI has also lowered the amount of money banks need to keep in reserve – a move it claims will provide some 180 billion rupees (£2.1 billion) in extra cash for them to lend to borrowers.

At close of play today (January 29th), the Mumbai Sensex fell by 0.5 per cent to an index value of 19990.9 points.

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