RBI rate cut to boost demand across sectors, be positive for India's economic growth: ASSOCHAM
The reduction in the policy interest rates by the Reserve Bank of India (RBI) is a catalyst for boosting demand across different sectors of the economy, a top industry body said on Friday.
In a bid to provide flexibility to respond to the macroeconomic environment, RBI Governor Sanjay Malhotra announced the repo rate cut by 25 basis points to 6.25 per cent.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM) President Sanjay Nayar, the 25 basis points cut in the repo rate would help push demand in several key sectors of the economy, including housing, automobile, and consumer durables amongst others.
"Any drop in cost of borrowing gives a positive push not only to the demand side of the economy but also helps corporate balance sheets," he added.
As RBI MPC kept the inflation forecast unchanged for the current financial year, Nayar further mentioned that if the inflation rate retains its downward trend, "we could expect further rate cuts by the RBI in the next few quarters".
