Piyush Goyal confident of rate cut by Reserve Bank in coming months

Commerce and Industry Minister Piyush Goyal exuded confidence that the Reserve Bank will cut interest rates as inflation is under control

Commerce and Industry Minister Piyush Goyal on February 19 exuded confidence that the Reserve Bank will cut interest rates as inflation is under control.

The RBI has been maintaining the benchmark interest rate at an elevated level of 6.5% since February 2023.

Mr. Goyal said that the economic fundamentals of the country are strong and inflation is under check.

He said that the average inflation of 10 years in India is about 5 to 5.5%.

It was the best-performing decade and because of that, the interest rate came down "dramatically" and the central bank was strengthened and had the ability to bring down the interest rate.

"Of-course in the last year and a half, post Ukraine-crisis, interest rates have again gone up by 250 basis points. But now that inflation is pretty much in control, I suspect we will soon see the reversal of the rate hikes starting in India, whether it happens in the next or the second monetary policy from now. I think it's only a matter of time," Mr. Goyal said.

In case the Reserve Bank goes for a reduction in the key short-term lending rate (repo), the cost of borrowings both for corporate as well as individuals, will go down, and hence EMIs.