No. PR – 167
December 8, 2021
RBI’s accommodative stance will support the anticipated growth trajectory: PHD Chamber
Mr Pradeep Multani, President, PHD Chamber of Commerce and Industry, appreciates the RBI’s accommodative policy stance to keep repo rate unchanged at 4%. This will support the anticipated growth trajectory and continue to mitigate the impact of COVID-19 on trade and industry, he added.
The accommodative policy stance at this juncture would not only pave the way for a double digit GDP growth in the current year 2021-22, but will also help in creating a strong, sustainable and vibrant economy going forward, said Mr Pradeep Multani.
Reserve Bank of India’s Monetary Policy Committee has decided to keep the repo rate unchanged at 4% and maintain accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on economy and keep inflation within the target. Reverse repo rate also remains unchanged at 3.35%, according to Monetary Policy Statement of December 8th, 2021.
It is inspiring to note that RBI has retained the projection for GDP growth at 9.5% for FY 2021-22 despite the prevailing uncertainty caused by new variant of Coronavirus, said Mr Pradeep Multani.
The RBI’s view on peaking of headline CPI inflation in Q4 FY 2021-22 and softening thereafter, is highly encouraging and will build consumer confidence, said Mr Pradeep Multani.
The RBI’s decision to provide one more option to banks to prepay the outstanding amount of funds availed under the Targeted Long-Term Repo Operations (TLTRO 1.0 and 2.0) will effectively contribute in re-balancing the liquidity surplus in the economy, Mr Pradeep Multani.
The announcement of non-requirement of approval of RBI by banks incorporated in India for infusing capital in their overseas branches and subsidiaries, retaining profits in these centres and repatriating/ transferring profits therefrom, if they meet the regulatory capital requirements, is highly encouraging, said Mr Pradeep Multani.
Going ahead, we look forward to a double digit growth of 10.25% in FY 2021-22 supported by the RBI’s conducive policy environment and various structural reforms undertaken by the Government during the last many quarters, said Mr Pradeep Multani.
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 Mr Pradeep Multani
PHD Chamber of Commerce and Industry