RBI's rate cut decision to act as investment booster: FICCI

FICCI President Pankaj Patel on Wednesday welcomed Reserve Bank of India's (RBI) move to cut 25 basis points (bps) in repo rate calling it an investment booster.

"The 25 bps cut in repo rate is a welcome move. The current situation, however, warranted a steeper cut of 50 bps in the repo rate. The private investment cycle remains weak and the reduction in the rate will be an investment sentiment booster," said president FICCI, Pankaj Patel.

Pankaj Patel also revealed the results of FICCI's latest business confidence survey, according to which companies were still operating at sub-optimal capacities while the demand conditions remained a concern for businesses.

"Further, the setting up of an internal study group to study the marginal cost of funds based lending rate (MCLR) system with the objective of improving monetary transmission is a positive step. FICCI also looks forward to constitution of a high-level task force which would put in place a transparent and real time public credit registry system," added Patel.

Earlier today, the RBI announced a reduction in the repo rate by 25 bps under the liquidity adjustment facility ( LAF), bringing it down from 6.25 percent to six percent.