India Inc unhappy with RBI on rates
Industry body Assocham said the focus continues to be on rising inflation and not on the country's economic growth. "The industry is disappointed that the key policy rate, the repo rate, has not been reduced. The focus continues to be on managing inflation with the growth continuing to suffer," Assocham President Rajkumar Dhoot said.
The efforts to contain inflation by increasing interest rates in the last two years have not really helped the economy. Rather high rates have impacted industry's investment thus affecting the growth momentum, the chamber said in a statement.
Sharing similar views, CII hoped that the RBI would intervene sooner than later to cut repo rates which would help in boosting industrial production and reviving the economy.
Ficci said it feels while a cut in rate is imperative to revive investment growth, there would be some leeway now for banks to lend more via the cash reserve ratio (CRR) cut.
The Reserve Bank, in its mid-year monetary policy review, today left the key interest rates unchanged but reduced CRR by 0.25 per cent to infuse additional liquidity of Rs 17,500 crore into the financial system.
Accordingly, the CRR or the portion of deposits banks have to park with the RBI now stands at 4.25 per cent while the repo rate, at which RBI lends to the system, has been retained at 8 per cent.
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