Zee Media Bureau
New Delhi: Union Finance Minister Arun Jaitley on Thursday hailed the Reserve Bank of India's move to cut the interest rate, saying it is positive for the Indian economy and will certainly help in reviving the investment cycle which the government is trying to restore.
Jaitley further said that the rate cut will leave more money in the hands of people for greater spending and boost development.
"The RBI decision to cut the interest rate will lead to more money in the hands of the consumer for greater spending. It is positive for the Indian economy and it will certainly help in reviving the investment cycle the government is trying to restore," said Jaitley who has been nudging the central bank to ease the interest rate to lower the cost of capital.
The reactions from the Finance Minister came shortly after the RBI slashed the benchmark interest rate by 0.25 percent to 7.75 percent with a view to boost growth.
The decision to reduce repo rate came a fortnight ahead of the scheduled date of monetary policy announcement on February 3.
"It has been decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 percent to 7.75 percent with immediate effect," Reserve Bank said in a statement today.
The RBI has been keeping the benchmark interest rate at elevated level at 8 percent since January 2014.
The RBI, however, decided to keep the cash reserve ratio (CRR), the portion of deposits which the banks are required to have in cash with the central bank, unchanged at 4.0 percent.
Following reduction in the repo rate, the reverse repo rate has been adjusted to 6.75 percent and the marginal standing facility (MSF) rate and Bank Rate to 8.75 percent.
With Agency Inputs
