After the Reserve Bank of India (RBI) cut repo rate in its latest bi-monthly policy, Finance Minister Piyush Goyal has said the RBI’s this move will give a boost to the economy by providing affordable credit to small businesses and homebuyers. He added that it will further boost employment opportunities.
Goyal said that the rate cut would also impact bank's business by boosting demand in the economy. Expounding on the benefits of the rate cut, he said banks would come out of trouble faster this way. Cheaper loans would boost demand and already banks are witnessing a rise in credit growth rates.
The RBI surprisingly reduced the repo rate by 25 basis points to 6.25 percent and also changed the policy stance to 'neutral' from the earlier 'calibrated tightening', signalling further softening on its approach to rates if the inflation prints at the projected lower levels.
