TIL Desk/Business/New Delhi/ The Reserve Bank of Indias decision to cut lending rates goes beyond lowering the rates and gives a broad message that would impact the economy as a whole, says Economic Affairs Secretary Subhash Chandra Garg.
“As far as the impact is concerned, these rate decisions play into the economy in a very serious manner. It’s not just that there would be some reduction in loan rates or something. But it gives a very clear stance,” Garg told in an interview.
He said the reduction in interest rates for loans would just be the immediate effect of the RBI’s decision and more symptomatic. However, the decision itself gives a broad message to the economy that the lower interest rates are justified.
The Reserve Bank of India (RBI) cut its key lending rate to commercial banks by 25 basis points to 6.25 per cent on Thursday. It is the first cut in one and a half years. The RBI also changed its stance from ‘calibrated tightening’ to ‘neutral’.