AMN /
Finance Minister Arun Jaitley has welcomed the RBI decision to reduce repo rates by 50 basis points to 6.75 percent. Talking to media persons in New Delhi, Mr Jaitley said, RBI rate cut actually implies that inflation pressure has moderated significantly and is now in comfort zone.
He said there is need to have a constant vigilance now on the inflationary front. Mr Jaitley said, the government is committed to meeting fiscal deficit targets in order to consolidate the gains achieved by the contained inflation. The minister said the decision by the RBI will significantly provide policies support to the real economy and help in the recovery process. He expressed hope that the bank will now transmits of the rates cuts which will boost confidence and investments.
The minister said, it will also help the corporates to raise the external borrowings through rupees denominated offshore bonds. Speaking on the occasion, Secretary of economic affairs Sashikant Das said the RBI decision to increase the FPI investment to 5 percent of the outstanding stock by March 2018 in the government securities is welcome step. The current operating limit of the outstanding stock is 3.8 percent. He informed that the additional 1 lakh 20 thousand crore rupees will inflow into this segment up to March 2018.
Chief Economic Advisor Arvind Subramanian said government is looking to transmission of RBI’s rate cuts to rest of the economy, and will work with the apex bank on it. Mr Subramanian said the inflationary pressure is significantly moderate now which creates room to provide policy support to the economy. He said the rate cut will boost the confidence in the investors.