(CRR) for banks as low inflation gave policymakers room to focus on supporting growth.

India's benchmark equity indexes, the BSE Sensex and Nifty 50, about 1% each on Friday, posting their best one-day gain in two weeks as the rate cut fuelled domestic growth expectations.

India's benchmark 10-year bond whipsawed between gains and losses as traders digested the central bank's policy moves, including a shift in stance from 'accommodative' to 'neutral.'

The yield on the benchmark paper was last quoted a tad higher at 6.2237%. Meanwhile, dollar-rupee forward premiums fell in reaction to the rate cut with the 1-year implied yield dropping 10 basis points to 1.81%. The Indian central bank's "larger-than-expected 50 bps rate cut and 100 bps cut in the cash reserve ratio should support INR," DBS said in a Friday note. "We will consider lowering USD/INR's forecast if the US Federal Reserve pivots towards a rate cut later this year and sets the stage for more USD weakness," the noted added.

On the day, the dollar index was up 0.3% at 98.9 in the run-up to release of closely watched U.S. non-farm payrolls data which will offer cues on how the world's largest economy is faring in the face of trade policy spurred uncertainty. (Reporting by Jaspreet Kalra; Editing by Nivedita Bhattacharjee)