India’s central bank cut its key interest rate by a quarter of a percentage point to 6% on Thursday, moving to prop up economic growth ahead of a national election next week.

The interest rate is what the federal bank charges on lending to commercial banks.

Lower interest rates help borrowers, though they can also spur inflation. The rate cut comes amid a deterioration in the outlook for regional and global growth.

Reserve Bank of India Governor Shaktikanta Das smiles during a press conference to announce the first bi monthly monetary policy in Mumbai, India, Thursday, April 4, 2019. (AP Photo/Rajanish Kakade)
Reserve Bank of India Governor Shaktikanta Das smiles during a press conference to announce the first bi monthly monetary policy in Mumbai, India, Thursday, April 4, 2019. (AP Photo/Rajanish Kakade)

In a bimonthly review of the economy released on Thursday, the Reserve Bank of India cut the retail inflation forecast to 2.9-3% for the first half of this fiscal year. It cited lower food and fuel prices and expectations for a normal rainy season.

In its February policy statement, the RBI had projected retail inflation at between 3.2-3.4%.

India’s financial year runs from April-March.