( CNN ) -- India 's central bank cut key lending rates for the first time in three years on Tuesday in an aggressive effort to stimulate growth and boost investment at a time when the gloss is rapidly coming off Asia 's third largest economy . The Reserve Bank of India cut the repo rate -- the rate at which the central bank lends to commercial banks -- by 50 basis points to 8 per cent . The more-than-expected reduction was widely welcomed by business . After having increased interest rates 13 times since March 2010 , the RBI 's move reflects a shift in the bank 's policy from focusing exclusively on reining in inflation -- which at 6.89 per cent remains high -- to reviving the country 's slowing economy , which has been choked by its aggressive monetary tightening strategy . `` The rate cut shows that the attention has now shifted towards stimulating growth , there is no doubt about that , '' said A Prasanna , an economist at ICICI securities . `` The RBI was worried about inflation but from the latest data we can see that it has come down and is somewhat under control . Now that inflation 's trajectory is downward the RBI is more confident to cut rates , '' he added . The decision announced by Duvvuri Subbarao , India 's central bank governor , comes after China , Brazil and Indonesia moved to ease liquidity , as emerging economies try to shield themselves from the European debt crisis . Growth in the last quarter of 2011 was the slowest in nearly three years , rising 6.1 per cent in the three months to December 31 , compared to above 8 per cent a year earlier . Meanwhile , inflation has eased persistently over the last year . The wholesale price index rose 6.89 per cent in March -- below 7 per cent for the third consecutive time . Indian companies welcomed the move . Industrialists had been begging the central bank to cut rates over the last two years , as they blamed the RBI 's aggressive monetary tightening policy for stalling investment and damaging overall growth . Rajiv Kumar , director of the Federation of India Chamber of Commerce and Industry , said that the move would be overwhelming welcomed by business . `` We called for a bold move and finally we got a bold rate cut , '' said Mr Kumar . However , he cautioned that a 50 basis point rate cut would not be enough to put the Indian economy back on strong growth track . He said that the government had to push through structural reforms to ease investment . `` The RBI has done its part now the government needs to do its part , '' said Mr Kumar . `` Unfortunately they [ the government ] do n't inspire much confidence at the moment . '' Economists warn that there will not be a wave of rate cuts in the following months , especially as inflation will remain a key concern for the central bank over the next three quarters .
Indonesia 's central bank cut key lending rates for the third time in a year earlier . Comes as the gloss is rapidly coming off Asia 's first largest economy .