Highlighting RBI’s rate cut move, Finance Minister Arun Jaitley has stated that the repo rate cut by 25 basis points to 7.75% is a positive development for economy and will make funds cheaper which in turn will have borrowers to pay lesser interest rate. Further, it will lead to more money in the hands of the consumers and result in greater spending.
By adding further, the Minister has asserted that the latest move will certainly help in reviving investment cycle that the government seeks to restore. Industry Inc also welcomed the latest RBI’s move. CII Director-General, Chandrajit Banerjee stated that a rate cut would propel investment demand and spur spending in rate-sensitive consumer durables and give fillip to construction activity. CII expects that going forward RBI would shift its stance in favour of growth, given that the trend in inflation is clearly subdued.
In a big surprise, the Reserve Bank of India (RBI) has cut repo rate by 25 basis points to 7.75% with immediate effect. This was first rate cut by RBI since January 2014. Keeping inflation battle at the top of agenda, central bank had been keeping interest rate at 8%, which has impacted the economic growth as well as investments.