The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points on Friday and slashed the reserve ratio for banks as low inflation gave policymakers room to focus on supporting growth amid a volatile global economy.

The central bank also unexpectedly reduced the cash reserve ratio (CRR) for banks by a steep 100 basis points, likely to unlock Rs 2.5 lakh crore liquidity to the banking system.