Sitharaman lauds RBI rate cut, says need quick transmission
After the RBI Governor announced an emergency rate cut on Friday, Union Finance Minister Nirmala Sitharaman lauded the move and stressed the need for lower cost of retail loans and that reduced interest rate needs quick transmission.
Posting on Twitter, Sitharaman said that the three-month moratorium on payments on term-loan installments and interest on working capital would give the much-needed relief amid the national lockdown in view of the coronavirus scare.
"Appreciate @RBI @DasShaktikanta's reassuring words on financial stability. The 3- month moratorium on payments of term loan instalments (EMI) & interest on working capital give much-desired relief. Slashed interest rate needs quick transmission. #IndiaFightsCoronavirus," the FM said.
The Reserve Bank of India on Friday cut the repo rate by 75 basis points to 4.4 per cent. This is the first repo rate cut after the October 2019 monetary policy review.
This monetary policy review of the RBI was rescheduled in wake of pandemic which originally scheduled to take place on March 31, 2020 and April 3, 2020, but had to be called held on March 24, 26 and 27 due in view of the coronavirus crisis.
As the RBI cuts lending rates, it creates space for banks to reduce interest rates on retail loans, which would eventually help the common man and businesses.
Although concerned about the global economy and a growth slowdown in India, RBI Governor Shaktikanta Das said that the macro-economic fundamentals of the Indian economy are sound.
Applauding the statement, Sitharaman said in another tweet: "Also welcome @RBI governor @DasShaktikanta's statement: 'The macro-economic fundamentals of the Indian economy are sound, and in fact stronger than what they were in the aftermath of the global financial crisis of 2008-09.' And his timely reminder to #StayCleanStaySafeGoDigital."
He noted that if the coronavirus pandemic is prolonged and supply chain disruptions get accentuated, the global slowdown could deepen, with adverse implications for India. IANS