RBI Key
rate cuts to support fiscal stimulus, encourage investment, boost
consumer sentiments and demand: Mr. Sharad Kumar Saraf, President, FIEO
The
Reserve Bank of India cuts benchmark interest rates for the fifth time
to support other fiscal measures announced by the Government to boost
growth. The RBI reduced its key lending rate (the repo rate) by 25 basis
points to 5.15%, which takes cumulative cuts so far this year to 135
bps observed Mr Saraf.
President,
FIEO said that RBI has rightly acknowledged the challenges faced by the
global economy as both advanced as well as emerging markets are showing
weakening demand and contracted manufacturing. WTO has already
significantly cut its forecast for the global trade growth to 1.2% for
2019. The challenges in exports will continue and may aggravate with
geo-political situation. Mr Saraf urged the Government to ensure that
various fiscal stimulus announced by the Government are put into
operation so that the benefit flows down to the industry.
 |
| Sharad Kumar Saraf, President, FIEO |
FIEO
Chief said that reduction in the credit rates will further encourage
investment both by the domestic companies as well as by FDIs since
corporate tax rate in India is now amongst the best in the world. He,
however, urged the banks to ensure that the cut in the rates by RBI are
adequately reflected in the lending rates of the bank so that private
investment may be encouraged and consumer loans may get a push to help
various segments of economy.
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