June 6, 2019
PHD Chamber welcomes cut in repo rate
While welcoming the 25 basis points cut in repo rate from 6% to 5.75% by RBI in today’s review of monetary policy, the industry body, PHD Chamber of Commerce and Industry said in a press statement issued here today that it will help to stimulate demand, boost investments, enhance exporters’ competitiveness and growth of the industrial sector.
RBI in its Second Bi-monthly Monetary Policy Statement, 2019-20, has reduced the repo rate to 5.75% from 6%, reverse repo rate under the LAF at 5.50%, marginal standing facility (MSF) rate and the Bank Rate at 6%.
While common man will be benefited with softening of EMIs on loans; the ripple effect of rate cut will enable small business to fulfill their credit requirements, said the PHD Chamber.
At this juncture, the transmission of the policy rate cut by the banking sector in terms of reduced lending rates would be crucial to boost liquidity, induce demand and industrial growth in the country, said the industry body.
Continuation of rate cut in the coming times would be crucial to help demand to remain intact to enhance sentiment for investments and expanding production capacities.
Going ahead, we expect repo rate to come down to 5% in the coming quarters for adequate availability of credit to the industry especially to the MSMEs sector.
Koteshwar Prasad Dobhal