Mumbai: Union Minister Piyush Goyal on Friday welcomed the move by the Reserve Bank of India (RBI) to cut the repo rate and reduce the reverse repo rate, saying that it would extend COVID-19 by extending affordable loans to MSMEs and other businesses. The middle will boost demand.
“Welcome @RBI’s move to cut Repo Rate by 40 basis points from 4.4 % to 4% and reducing Reverse Repo Rate to 3.35%. This will boost demand amid COVID-19 by extending affordable credit to MSMEs & other businesses, helping realise PM @NarendraModi ji’s vision of #AatmaNirbharBharat,” Goyal tweeted on Friday.
Welcome @RBI’s move to cut Repo Rate by 40 basis points from 4.4 % to 4% and reducing Reverse Repo Rate to 3.35%.
— Piyush Goyal (@PiyushGoyal) May 22, 2020
Earlier today, RBI reduced the repo rate from 40 basis points to 4 per cent and extended the loan repayment moratorium for three months till August 31. The reverse repo rate is 3.35 per cent.
Repo rate is the rate at which a country’s central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.
This comes when the country has been closed for almost two months to stop the spread of coronovirus. The central government has also announced an economic relief package of Rs 20 lakh crore in view of the crisis.