New Delhi: Taking a big step, the Reserve Bank has announced a cut in the repo rate. The Finance Ministry has welcomed the RBI move. The ministry said that this would help in boosting the government's economic growth. The central bank on Friday reduced the repo rate by 0.25 percent to 5.15 percent. After reducing the rate, the government believes that in the recent announcements that it has made to speed up economic growth, the reduction in the repo rate will be helpful. The government has taken several steps since August 23 to boost the economy.

These include a reduction of around 10 per cent in tax of companies, merger of banks, announcement on FDI and major announcements made for the housing sector. Apart from this, many types of concessions have been given. The Reserve Bank has lowered the GDP growth forecast for the current fiscal from 6.1 per cent to 6.1 per cent after the pace of economic growth came down to five per cent in the first quarter. It is expected that with the decision of RBI, the availability of cash in the market will increase further in the coming days and demand and consumption will increase. The central bank has announced a policy rate cut for the fifth consecutive time in this calendar year. The top bank has cut the repo rate by a total of 1.35 percent so far this year.

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