The bank lowered its overnight deposit rate to 8.5 per cent and cut the overnight lending rate to 10 per cent.

Annual inflation continued to decline, reaching an 18-month-low of 9.9 per cent in June, down from 10.2 per cent in May, the bank’s Monetary Policy Committee said in a statement on 30 July.

Inflation peaked at 23.6 per cent in August 2008.

“In the meantime, the global financial crisis continues to interrupt the domestic growth momentum,” the statement said.

Economic growth in the third quarter of the 2008-09 financial year was 4.3 per cent compared with an average of 7 per cent over the past three years.