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RBI rate cut to support growth: Jaitley

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By NewsGram staff writer

New Delhi: Finance Minister Arun Jaitley, on Tuesday, said that the decision of Reserve Bank of India to cut short-term lending rates by 50 basis points will support growth, while showing that inflationary pressures were now moderating.

The finance minister also welcomed the decision to allow the corporate sector to issue rupee-denominated bonds in overseas markets, often called ‘Masala Bonds’, and said it will give access to additional credit for India Inc.

“Today’s rate cut will boost investment and growth,” Jaitley said, soon after the 4th bi-monthly monetary policy update by Reserve Bank of India Governor Raghuram Rajan, adding that the government would like to see commercial banks reciprocating with own interest rate cuts.

“We are looking forward now to the transmission of these cuts, which will help boost economy and confidence,” the finance minister added.

The central bank cut by 50 basis points its repurchase rate, or the interest charged on short-term borrowings, to 6.75 percent, which automatically cut the indexed reverse repo rate or the interest payable by the central bank on short-term deposit, to 5.75 percent.

Speaking about the rupee-denominated bonds, Economic Affairs Secretary Shaktikanta Das said there was not only an appetite for such commercial paper in the global markets, but it would also shy the corporate sector from currency fluctuations.

“This is also the first time that the foreign portfolio investors can invest in state-governments backed securities, which was a demand raised by state governments for a long time,” Das said, adding that could translate into an inflow of Rs 51,000 crore.

(With inputs from IANS)

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RBI To Transfer 50,000cr Surplus To The Central Government

The Reserve Bank's income comprises of earnings from foreign and domestic sources, with the major portion being contributed by interest receipts, complemented by relatively small amounts of income from discount, exchange, commission, etc.

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Reserve Bank of India. VOA

The Reserve Bank of India (RBI) on Wednesday said that it will transfer Rs 50,000 crore as surplus to the central government for the year ended June 30, 2018.

The Central Bank which follows the July-June year had transferred Rs 30,659 crore to the government’s coffers for the year ended June 30, 2017.

According to RBI, the decision to transfer the surplus was taken by its Central Board which met here on Wednesday.

The Central Bank which follows the July-June year had transferred Rs 30,659 crore to the government's coffers for the year ended June 30, 2017.
The Central Bank which follows the July-June year had transferred Rs 30,659 crore to the government’s coffers for the year ended June 30, 2017.

The Reserve Bank’s income comprises of earnings from foreign and domestic sources, with the major portion being contributed by interest receipts, complemented by relatively small amounts of income from discount, exchange, commission, etc.

Also Read: RBI Penalty not to have any material impact: IDBI Bank

The RBI Act stipulates that after making provisions for contingencies and corpus funds as defined therein, the balance profit of the apex bank is to be transferred to the central government. (IANS)

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