NEW DELHI: the decision of the Reserve Bank of India to keep the key unchanged interest rates and maintaining an accommodative monetary policy will boost business and consumer confidence, India Inc. said on Friday.
On Friday, the central bank is expected to keep interest rates unchanged at an all-time high of 4%, as it chose to support the economic recovery rather than inflation.
He also maintained an accommodating stance as the economy has yet to recover from the impact of the second wave of COVID.
PHDCCI Chairman Sanjay Aggarwal said the central bank was maintaining the status quo, despite high inflation fueled by a few commodities.
âPursuing an accommodative stance to re-launch and sustain the economic growth trajectory amid the impact of COVID-19 will boost business and consumer confidence.
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It is encouraging that the RBI has withheld the 9.5% GDP growth projection for FY2022 in the difficult period caused by the pandemic, âAggarwal said.
Going forward, he said, a continuation of the RBI’s accommodative policies to rejuvenate aggregate demand in the economy is expected.
“We urge the banking industry to pass on any reductions in the repo rate by the RBI over the past fiscal year in order to highlight the benefits to commerce, industry and consumers for rejuvenating the trajectory of the market. demand and economic growth in the future, âAggarwal added.
Assocham said all credit must go to the RBI for prioritizing growth and maintaining an accommodating stance on policy rates.
âHis expectations that inflation should moderate from the third quarter of the current fiscal year are realistic, as various supply-related issues would be resolved by then. Also, with the monsoon accelerating , a positive impact on food inflation should be observed, “the chamber said in a statement.
By keeping the low interest rate regime in place with an unchanged 4% repo rate, the RBI and the government have been on the same page to fully support nascent growth, he said. added.