RBI monetary policy review: ‘Status quo clears uncertainty, move to help car buyers decide’

RBI keeping key interest rate unchanged will clear uncertainty and help car buyers firm up purchase decisions to cash in on year-end promotional offers, according to automobile industry players.

By:Updated: Mar 20, 2016 11:06 PM

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RBI monetary policy review: Maruti Suzuki India, rival Hyundai Motor India and utility vehicle major Mahindra & Mahindra posted double-digit growth rates in November while others like Honda Cars and Toyota saw a decline in sales during the month. (Reuters)

RBI monetary policy review: RBI keeping key interest rate unchanged will clear uncertainty and help car buyers firm up purchase decisions to cash in on year-end promotional offers, according to automobile industry players.

“Although there is always an expectation of further reduction of interest rates, the latest step is a positive one as it removes uncertainty,” Hyundai Motor India Senior Vice President (Sales & Marketing) Rakesh Srivastava told PTI.

He further said: “The move will help those buyers who have delayed purchases waiting for rates to come down to firm up decision and buy making use of strong year-end promotional offers.”

Srivastava said in the past one year RBI has been taking many strong initiatives to control inflation along with reduction in interest rates besides improvement of liquidity in the market.

Echoing similar views, Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur said the industry as a whole understands the fact that RBI wants to control inflation.

“We will not say that we are extremely disappointed with this step (status quo). Today interest rate is just one of the factors that drives vehicle sales as there are other macro economic factors which have an impact on demand,” he said.

Mahindra & Mahindra Group Chief Financial Officer VS Parthasarathy said: “Today’s absence of rate action was a forgone conclusion. This time around the focus shifted to base rate restructuring and the transmission of lower rates to the wider economy.”

In addition, the retention of growth and inflation targets and remaining accommodative on evolving data points demonstrates an outlook of stability which is welcome, he added.

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