Sitharaman seeks more rate cuts, says no review on overseas borrowing plan: report

Finance minister Nirmala Sitharaman, called for a “significant” reduction in the central bank’s policy rates and said the government did not intend to review the budget proposal for overseas sovereign borrowings, the Economic Times (ET) reported on Monday.

India’s benchmark 10-year bond yield was down 10 bps at 6.43 per cent after falling to 6.42 per cent immediately after market opened on the back of her comments.

The minister also said the increase in surcharge on foreign portfolio investments (FPI) was not intended to hurt investors, according to an interview published by the paper.

An influential Hindu nationalist group close to Prime Minister Narendra Modi’s ruling Bharatiya Janata Party has demanded his government review its plan to raise money by selling foreign currency bonds, Reuters reported earlier this month.

“I am not doing any review. I have not been asked by anyone to do a review,” Sitharaman told ET.

The minister also told the paper there was room for further interest rate cuts.

“I’ll honestly wish rate cut … and yes a significant rate cut, would do a lot of good for the country,” Sitharaman told the paper in an interview.

“We will now have to look at that route with a lot more hope. And, the industry also feels that there is space for it.”

Indian shares pared early gains and moved lower on Monday with the broader NSE Nifty falling 0.3 per cent.