RBI's rate cuts to propel growth, spike demand: India Inc
was much needed given that GDP growth is moderating and industrial production is decelerating month after month.
The rate cut is an encouraging move when high interest rates were having negative impact on the country's economic growth."
PwC India Director Shinjini Kumar said the RBI move is consistence with the "growth push" that the economy needs, but added that the worries due to current account were very real.
"In line with expectations, the RBI cut the repo rate by 25 bps to 7.75 per cent, but once again maintained its trend of surprising the markets by cutting the CRR by 25 bps to four per cent," said Citi Research.
Apparel Export Promotion Council's Chairman A Sakthivel said: "The tight liquidity condition which was prevailing since long will surely ease out. It will, in turn, boost our economy and robust the structural deficit in the system by infusing the permanent primary liquidity in the system."
Credit rating agency ICRA's Managing Director and CEO Naresh Takkar said the RBI stances are supportive of economic growth and would benefit interest-rate sensitive sectors such as automobiles, housing and the MSME segment.
Crisil said the reduction in rates would enable banks to lower lending rates and improve transmission of monetary policy.
"As inflationary expectations adjust downward, banks will have greater flexibility in reducing deposit rates, thereby lowering their cost of funds. This will create further space for a reduction in lending rates in coming months," said Crisil Chief Economist Dharmakirti Joshi.
Federation of Indian Export Organisation (FIEO) Chief M Rafeeque Ahmed said the
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