With the Reserve Bank of India's second bi-monthly monetary policy review of this fiscal coming up, the government on Saturday strongly urged central bank Governor Raghuram Rajan to cut interest rates."I only ask for an affordable rate of interest for industry because credit internationally is now very cheap," Commerce Minister Nirmala Sitharaman said on the programme "Talkathon", a new media initiative of the information and broadcasting ministry telecast live on Saturday evening."A rate cut is essential for economic revival to take place," she added.Noting how inflation had declined also with wholesale inflation going into the negative and the current account deficit had come down to 1.3 percent, Power Minister Piyush Goyal said: "The whole country is waiting with bated breath to see if the RBI governor reciprocates.""I am hopeful that interest rates will go down in the coming days," he said.
Rajan has twice cut the repo rate at which RBI lends to commercial banks over two unscheduled monetary policy reviews in January and March, bringing it down to the current 7.50 percent. On the other hand, the scheduled reviews in February and in April passed without any changes.He kept interest rates on hold at 7.50 percent in April saying he was waiting for banks to pass on the RBI's previous rate cuts, and dismissed bankers' claims that the cost of funds remained too high.