No. PR- 074
August 6, 2021
PHD Chamber appreciates status quo in policy rates and continuation of accommodative stance
Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, welcomes and appreciates the decision of RBI’s Monetary Policy Committee to maintain Status Quo, despite the high inflation stoked by a few products.
Continuation of accommodative stance to revive and sustain economic growth trajectory amid the impact of COVID-19 will boost the confidence of business and consumers, said Sanjay Aggarwal.
RBI has kept the repo rate unchanged at 4% and reverse repo rate unchanged at 3.35% in its Monetary Policy Statement of August 6, 2021.
It is encouraging that RBI has retained the projection for GDP growth at 9.5% for FY 2022 in the difficult time caused by pandemic, said Sanjay Aggarwal.
Though RBI has increased its projected CPI for FY 2022 to 5.7% as compared to earlier estimate of 5.1%, however, it is inspiring to note that the higher trajectory of CPI inflation is transitory in nature as it is majorly caused by supply-demand mismatches and high global commodity prices, said Sanjay Aggarwal.
It is highly laudable that more than 100 measures have been announced by RBI since the onset of pandemic to mitigate its impact, said Sanjay Aggarwal.
Extension the on-tap TLTRO scheme further by a period of three months, i.e. till December 31, 2021; extension of allowance to banks to avail funds under the marginal standing facility (MSF) for a further period of three months, i.e., up to December 31, 2021; and deferment of the target date for meeting the specified thresholds under Resolution Framework for COVID19 related stress to October 1, 2022 from March 31, 2022, will help meet the liquidity requirements in the country along with supporting the nascent and fragile economic recovery, said Sanjay Aggarwal.
Going ahead, we expect continuation of accommodative policy stance to rejuvenate the aggregate demand in the economy along with balancing the liquidity scenario in the country, said Sanjay Aggarwal.
We urge the banking sector to transmit all the cuts in the repo rate by RBI during last financial year to percolate the benefits to trade, industry and consumers for rejuvenating the demand and economic growth trajectory, going forward, said Sanjay Aggarwal.
PHD Chamber of Commerce and Industry