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The Reserve Bank of India reduced the major repo rate to six percent for the second consecutive time on Wednesday to strengthen the economy amidst the concern of America’s counter -duty.
New Delhi: The Reserve Bank of India reduced the major repo rate to six percent for the second consecutive time on Wednesday to strengthen the economy amidst the concern of America’s counter -duty. At the same time, the central bank indicated another cut in the interest rate in the coming time, genering its stance from ‘neutral’ to ‘neutral’.
Experts see it as a step to support the Indian economy amidst global uncertainty after experts impose 26 percent tariffs on Indian imports. Economist SP Sharma said, “Since he (America) has greatly increased tariffs, this will increase the prices of our products in the international market and will increase the competition in the international market.
So when the cost of capital decreases due to low repo rate, in that case, your production cost also decreases, so your product also becomes worth fighting in international markets. Therefore, this will benefit producers in the global market as well as in the domestic market, which will create equal opportunities.
Globally, now trade war between America and China
Economist Akash Jindal said, “This is not only a tariff imposed on India, but a tariff war is going on globally, because on globally, the trade war between the US and China is going on and this America-China trade war is going to affect India, so now since this rate cut is going to promote demand and consumption due to this rate cut, so this tariff will lead to some impact due to this rate cut, so this tariff will lead to some impact due to this rate cut, so this tariff will lead to some impact due to this rate cut.
So I think this is a good step and that is why I am saying that this tariff will partially balance the damage caused by war or trade war. Apart from this, the central bank has reduced the cash reserved ratio i.e. CRR to bring more liquidity to the economy and improve the rate cuts.
Low interest rates are expected to reduce the cost of capital, reduce production costs and Indian exports are expected to be promoted in the match. RBI has reduced India’s development estimate to 6.5 percent, which was 6.7 percent earlier. It has also revised the estimate of inflation from 4.2 percent to four percent, which will provide some relief to manufacturers and exporters.
Also read: Trump will get a shock again, pharma companies will also get tariff; India will be affected
