Former FM Chidambaram welcomes RBI rate cut of 0.5%

Former Finance Minister P Chidambaram has welcomed the 0.50% cut in interest rate announced by the Reserve Bank of India (RBI) saying it was overdue.

"I welcome the decision of RBI to reduce the repo rate by 50 basis points. This was perhaps overdue.

"Nevertheless, it signals a movement towards a lower interest rate regime and it is therefore welcome," he said.

He said more policy steps by RBI were possible if the government stayed firmly on path of fiscal consolidation.

"If government stays firmly on the path of fiscal consolidation and fiscal prudence, we can look forward to more policy steps by the RBI," he said.