Revive demand in the economy; 25 bps cut in repo rate was expected today: PHD Chamber

Revive demand in the economy; 25 bps cut in repo rate was expected today: PHD Chamber

Revive demand in the economy; 25 bps cut in repo rate was expected today: PHD Chamber

 

No.PR-183
February 2, 2016
New Delhi
 

Revive demand in the economy; 25 bps cut in repo rate was expected today: PHD Chamber
 

Amidst the recent economic developments in the world economy and impact on our financial markets, RBI should have reduced repo rate by at least 25 basis points to build not only the investors’ confidence but also to support consumer segment who are impacted by the burden of EMIs, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.
 

Time is most opportune to strengthen the sentiments of producers, consumers and investors, added Dr. Gupta.
 

Reviving demand scenario in the economy would be crucial for the fruitful outcomes of dynamic policy announcements such as Make in India, he added.
 

RBI in its sixth Bi-monthly Monetary Policy Statement, 2015-16 has kept repo rate unchanged at 6.75%, CRR unchanged at 4%, reverse repo rate under the LAF at 5.75% and  marginal standing facility (MSF) rate and the Bank Rate at 7.75%.
 

According to Dr. Gupta, on account of reduction in repo rate at this juncture would have rejuvenated demand in rural area and augmented buying of consumer durables’ vis-a-vis reduced costs of credit.
 

Recently, the US Federal Reserve kept the interest rate unchanged, which is also an indication that the world economy is volatile at this stage and recovery is not that much strong, added Dr. Gupta.
 

Going ahead, calibrated measures are needed to revive consumers and investors confidence to strengthen the growth of the economy, said Dr. Gupta.
 

Ends.

Koteshwar Prasad Dobhal
Consultant (PR)