Raghuram Rajan surprises everyone by cutting the benchmark repo rate by 50 basis points to a 4-1/2-year low of 6.75 percent. Raghuram Rajan says the big rate cut should not be viewed as Diwali present. Other lenders are expected to follow suit after RBI’s sharp repo rate cut.
The repo rate cut decision came in for praise from policymakers, including Finance Minister Arun Jaitley, who said that that transmission of RBI rate cuts by banks will boost investments.
The ruling BJP is claiming credit that it has fulfilled its poll promises.
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