Repo rate cut inspiring to re-capture industrial activity: PHD Chamber

Repo rate cut inspiring to re-capture industrial activity: PHD Chamber

Repo rate cut inspiring to re-capture industrial activity: PHD Chamber

 

No.PR-176
January 15, 2015
New Delhi
 

Repo rate cut inspiring to re-capture industrial activity: PHD Chamber
 

Repo rate cut by Reserve Bank of India is inspiring and would lead to re - capture industrial activity which is impacted by multiple factors and high borrowing cost is one of them said, Mr. Alok B. Shriram, President , PHD Chamber of Commerce and Industry.
 

The policy repo rate under the liquidity adjustment facility (LAF) has been reduced to 7.75% from 8%; Cash reserve ratio (CRR) of scheduled banks kept unchanged at 4% of net demand and time liabilities (NDTL); Continue to provide liquidity under overnight repos at 0.25% of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL of the banking system through auctions; and Continue with daily one-day term repos and reverse repos to smooth liquidity. Consequently, the reverse repo rate under the LAF will be 6.75% and the marginal standing facility (MSF) rate and the Bank Rate at 8.75%.
 

Surprising fall in the inflation rate especially the prices of essential commodities have created an environment for softening monetary policy stance. It will improve the credit availability and cost of credit in the economy which with positive sentiments is expected to revive the domestic demand in the ensuing months, believes Mr. Shriram.
 

Looking ahead, revival of industrial activity should be at utmost priority and implementation of recent reform measures to ease the doing business in India are expected to re-capture the growth momentum, he said.
 

ENDS

Koteshwar Prasad Dobhal
Consultant (PR)