India’s central bank surprised markets with a jumbo rate cut, seizing on cooling inflation to frontload monetary easing and bolster economic growth amid heightened global uncertainty.

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. It also increased the amount of liquidity - or supply of money - available in the system.