Union Minister Piyush Goyal on Friday welcomed the Reserve Bank of India's (RBI) move to cut repo rate and reducing the reverse repo rate saying that it will boost demand amid COVID-19 by extending affordable credit to MSMEs and other businesses.

Earlier today, the RBI slashed the repo rate by 40 basis points to 4 per cent and extended the loan repayment moratorium for another three months up to August 31. The reverse repo rate stands at 3.35 per cent.

"Welcome @RBI's move to cut Repo Rate by 40 basis points from 4.4 % to 4% and reducing Reverse Repo Rate to 3.35%. This will boost demand amid COVID-19 by extending affordable credit to MSMEs & other businesses, helping realise PM @NarendraModi ji's vision of #AatmaNirbharBharat," Goyal tweeted on Friday.

Welcome @RBI’s move to cut Repo Rate by 40 basis points from 4.4 % to 4% and reducing Reverse Repo Rate to 3.35%.

This will boost demand amid COVID-19 by extending affordable credit to MSMEs & other businesses, helping realise PM @NarendraModi ji’s vision of #AatmaNirbharBharat

— Piyush Goyal (@PiyushGoyal) May 22, 2020

Repo rate is the rate at which a country's central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.

This comes as the country has been under lockdown for nearly two months to prevent the spread of coronavirus. The Central government has also announced a Rs 20 trillion economic relief package in view of the crisis.