New Delhi: The decision by the Reserve Bank of India to keep key interest rates unchanged and maintain accommodative monetary policy will boost business and consumer confidence, India Inc. said on Friday. Interest rates unchanged at a record 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.
“Pursuing an accommodative stance to re-launch and sustain the economic growth trajectory amid the impact of COVID-19 will boost business and consumer confidence. It is encouraging that the RBI has withheld the 9.5% GDP growth projection for fiscal 2022 in the difficult period caused by the pandemic, ”Aggarwal 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, ”Aggarwal added.
Assocham said all credit must go to the RBI for prioritizing growth and maintaining an accommodating stance on policy rates.
“His 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.
Commenting on monetary policy, Ficci said the indication from the central bank to continue to take an accommodative stance, until necessary, to revive growth is encouraging.
“This is especially heartwarming as monetary policy normalization was expected. The RBI has wisely steered monetary policy through the pandemic. We are confident that the same thinking will continue in the future, especially in view of an anticipated third wave and continued weakness in the economy, ”the chamber said in a statement.
He also said the extension of the six-month deadline to meet financial metrics requirements under Resolution 1.0 announced last year was a respite. Also Read: Indians Can Now Pre-Book Upcoming Samsung Galaxy Phones, Here’s How
However, given the evolving COVID situation, some of the most stressed sectors may need a longer period to be able to meet financial parameters, he added. Also Read: Meet Azani, India’s Very First Electric Supercar! Up to 700 km on a single charge, sprints from 0 to 100 km / h in less than 2 seconds