India's central bank cut its key interest rate by half a percentage point, aiming to spur economic growth as stubbornly high inflation cools.

The reduction in the repo rate to 6.75 percent was the fourth rate cut this year.

Industry groups were pressing for an interest rate cut after the inflation rate fell to 3.6 per cent in August, the lowest since November.

Reserve Bank of India governor Raghuram Rajan also lowered India's growth forecast for 2015-16 to 7.4 percent from 7.6 per cent.