Welcoming the Reserve Bank of India's (RBI) decision to reduce the repo rate to 6.75 from 7.25%, Finance Minister Arun Jaitley on Tuesday said the central bank's decision will significantly provide policy support to the real economy and help in the recovery process.
"This decision of the RBI will significantly provide policy support to the real economy and help in the recovery process. We are looking forward to the transmission of these cuts, which will effectively help to boost confidence and investment," Jaitley told a press conference here.
"The government welcomes the RBI's decision to reduce the repo rate to 6.75 from 7.25%. There will be a need to have a constant vigilance now, on the inflation front. This decision of the RBI actually implies that inflation pressure have moderated significantly and are now within the comfort zone. The government is fully committed in meeting the fiscal deficit targets in order to consolidate the gains achieved by the contained inflation," Jaitley added.
The RBI on Tuesday announced a cut in the Repo Rate by 50 bps to 6.75%, while the Cash Reserve Ratio(CRR) remains unchanged at 4%.
RBI Governor Raghuram Rajan had also asserted that the central bank aims to get the inflation rate down to 5% by the end of fiscal 2016-17.
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