The Coimbatore chapter of Indian Chamber of Commerce Industry has welcomed the decision of the Reserve Bank of India to reduce the repo rate by 50 basis points from 7.25 to 6.75 percent.

In a statement, the Chamber President, D. Nandakumar said, “This move, we feel, will give a very good push in improving the sentiment and it is a big surprise to the market which expected only a 25 percent basis point cut.”

The reduction will also lower the interest rates for individual and corporate borrowers

Nandakumar also said that the government has understood the need to address the low capacity utilization and weak production indicators and that the RBI had responded accordingly by lowering the Repo rates.