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Monday, June 24, 2024

Maintaining status quo in RBI policy rates to boost growth momentum and contain inflation: FIEO Prez

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Hyderabad: Maintaining status quo in policy rates by RBI, to further provide boost to growth momentum and contain inflation, said FIEO President Dr A Sakthivel, here on Thursday.

In a release while reacting to RBI’s policy rates being kept unchanged at 6.5 percent, Dr Sakthi El said with US Fed also expected to keep their policy rates unchanged, the trade and industry was of the view that RBI will continue to follow the same path of maintaining the status quo on policy rates front.

RBI feels that the MPC decision is focused towards the objective of achieving medium-term target of consumer price index (CPI) inflation of 4 percent within a band of +/-2 percent, while supporting growth, FIEO Chief reiterated.

The decision to keep policy rate unchanged will further give boost to growth through increasing investments, he said while most Central banks have given more weightage to inflation as compared to growth, RBI stroke a nice balance between the two, giving primacy to growth, thereby maintaining the GDP growth forecast for FY24 at 6.5 percent.

FIEO President, said that the increasing investment will lead to further production and easing of supply thus reducing inflation in coming months.

Dr A Sakthivel said that the status quo in rates will help exporting community, whose cost of credit has gone up substantially due to upward revision in rate during last one and half year leading to the demand to increase the interest subvention from 2 and 3 percem to 3 and 5 percent respectively.

The resilient external sector growth backed by financial sector push has further given thrust to the economy.

Dr Sakthivel said that our goods and services exports will touch US$ 900 Bn in 2023-24, exhibiting a growth of about 15 percent growth, which is a huge achievement looking at the current global challenges.

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