Expecting a near-term boost to economy from RBI’s rate cut, Minister of State for Finance Jayant Sinha today said the decision should bring down the loan EMIs significantly and there is room for further easing of rates.
Soon after RBI’s decision to lower rates by 0.25 per cent, Mr. Sinha said that the rate cut was a vote of confidence for the Union Budget presented last week.
The rate cut would give a boost to economy in the near terms and EMIs will come down significantly, the Minister said.
“What is going to happen to rate cycle moving forward is going to be driven by data and RBI has signalled this clearly,” he said, while adding that further room for easing rates remains.
He said that inflationary expectations have collapsed and a global trend of deflation was prevalent.
“We have said in Parliament that we are pursuing a very prudent fiscal consolidation road map. Our aim is to move growth onto a sustainable, non-inflationary path... We are in a situation where we see EMIs (Equated Monthly Instalments for loan repayments) coming down.
“RBI has appreciated budget’s ‘fine balance’ It is a welcome step for all citizens of India as everyone is looking for near-term boost in economy,” he added.