RBI rate cuts to prevent further slowdown: Economists
Reserve Bank's fresh monetary stimulus through a cut in policy rates will prevent the economy from further sliding into slowdown, economists said.
By PTI |
NEW DELHI: Reserve Bank's fresh monetary stimulus through a cut in policy rates will prevent the economy from further sliding into slowdown, economists said.
"The rates cut create disincentive for the banks to hold bonds and they would be encouraged to lend funds outside," Prime Minister's Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar told PTI.
The Reserve Bank today cut the rates at which it lends and borrows short-term funds from banks by 50 basis points each. While repo (overnight lending rate) was cut to 5 per cent, reverse repo (overnight borrowing rate) was cut to 3.5 per cent.
"It (rates cut) might possibly accelerate the process of bringing in low interest rate regime, which will help in the speedy recovery of the economy," he said.
Some economists expect more rate cuts by the central bank in the coming months, though today's cut in key policy rates could be the last in the current financial year, they said.
"RBI's move was very much expected. The rates have been lowered to prevent further downside risk to growth," Crisil Principal Economist D K Joshi said.
"The rates cut create disincentive for the banks to hold bonds and they would be encouraged to lend funds outside," Prime Minister's Economic Advisory Council (PMEAC) Chairman Suresh Tendulkar told PTI.
The Reserve Bank today cut the rates at which it lends and borrows short-term funds from banks by 50 basis points each. While repo (overnight lending rate) was cut to 5 per cent, reverse repo (overnight borrowing rate) was cut to 3.5 per cent.
"It (rates cut) might possibly accelerate the process of bringing in low interest rate regime, which will help in the speedy recovery of the economy," he said.
Some economists expect more rate cuts by the central bank in the coming months, though today's cut in key policy rates could be the last in the current financial year, they said.
"RBI's move was very much expected. The rates have been lowered to prevent further downside risk to growth," Crisil Principal Economist D K Joshi said.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
