Not much surprised by the fourth bi-monthly monetary policy, Chandrajit Banerjee, Director General of CII said that RBI’s decision to maintain status quo on policy rates is not fully unexpected.
Banerjee said, “RBI’s decision to maintain status quo on policy rates is not fully unexpected as in the growth-inflation dilemma, the concern is to guard against the anticipation of upside risks emerging from inflationary expectations.”
“By all indications, the twin deficits – fiscal and current account are well under control and core inflation has been trending downwards. While on the other hand, industrial production has been muted. This could have been a good opportunity for the RBI to reduce rates,” he added.
Appreciate the RBI’s view that inflation needs to be dealt with once and for all, CII Director General said, “Presently, we are at the threshold of the busy credit season when the demand for bank credit is anticipated to go up.”
Hoping that the RBI turn more accmodative in the near future, Banerjee said, “The onset of the festive season is also likely to spur demand for consumer goods. The infusion of liquidity at this juncture, through a reduction in policy rates, would have provided an impetus to the feel good factor brought on by the recent burst of policy announcements made by the government.”
Reserve Bank of India on Tuesday kept the repo rate unchanged at 8percent. The central bank also kept CRR, SLR unchanged.
The reverse repo rate was also maintained at status quo of 7percent.
—ANI