The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points (bps) on Friday, a third consecutive reduction, and slashed the reserve ratio for banks as muted inflation provided space for policymakers to focus on supporting economic growth.

India's central bank has lowered interest rates by a deeper-than-expected half a percent - the third cut in a row amid falling inflation and lower growth in Asia's third largest economy. The repo rate now stands at 5.

This marks the third straight rate cut since February. It comes below the median estimates of 5.75% in a Reuters poll. India's central bank delivered an outsized cut to its benchmark policy rate, bringing it to 5.