The planning commission deputy chairman, Montek Singh Ahluwalia has said that the cut in repo rate by 50 basis points by the Reserve Bank of India would be putting the country’s economy back on track besides stimulating the growth of the nation.

The repo rate earlier was 8.50 points and in a significant move, RBI changed the repo rate to 8 basis points. It has resulted in dropping the reverse repo rate from 7.5 per cent to just 7 per cent.

The moment the news that the repo rate was reduced, the sensitive index of the Bombay Stock Exchange (BSE) traded green.

There are many advantages with the decrease in rapo rate. This not only boosts the economy of the country, but will enable banks to give loans for low interest rates. Notably, this is first time in there years that RBI has cut down the repo rates.

Notably, even economists are expressing their happiness over the decrease in rapo and reverse rapo rates. Stock markets trading green after this news itself indicates that it’s a good sign. We have to await and see whether banks are going to come out with interesting rates on various loans. (Phani)