The Reserve Bank of India has cut the repo rate from 8.5 to 8 percent, the first cut after three years of rate hikes. This rate cut may provide some stimulus to the economy.
This move was welcomed by the markets, with both the Sensex and Nifty going up.
There is a huge pent-up demand for home loans and auto loans in India. Once this market starts to receive loans at favourable rates, this would give a much-needed boost to consumers and help the economy.
Another bold rate cut some time soon would do a power of good.