The Finance Minister, P Chidambaram said that the repo rate cut will help in moderating inflation. This is a positive move which will enthuse both borrowers and investors, the FM added. The RBI’s move is consistent with the government's aim of maintaining high growth, he added.

According to officials at the Indian Overseas Bank, there is need to see the impact of this move on cost of deposits before passing it on to the consumers. There is a clear signal from the RBI to boost the economy, they said. Meanwhile, Officials at Oriental Bank have said that the repo rate cut is aimed at bringing down loan rates.