Industry bodies welcome RBI's rate hike
Post by ANI on Wednesday, December 7, 2022
Two industry bodies -- FICCI and PHD Chamber -- have appreciated the repo rate hike by Reserve Bank of India, with FICCI saying this pragmatic approach will nurture growth and PHD Chamber saying calibrated approach to maintain economic growth would be vital to attract investments as inflation is cooling down significantly.
In a statement from the Federation of Indian Chambers of Commerce and Industry (FICCI), its President Sanjiv Mehta said, "The Reserve Bank's policy action hiking the policy repo rate by 35 bps was widely anticipated as the war against inflation is still far from over. Retail inflation has remained above the Central Bank's tolerance threshold of 6 per cent through the year 2022." He said, "Core inflation remains sticky, and uncertainty continues to surround RBI's near-term inflation outlook given the complex geo-political developments in Europe, recurrence of adverse climate-related events and the still high commodity prices globally."
PHD Chamber of Commerce and Industry Senior Vice President Saket Dalmia said, "We welcome the increase in repo rate by 35 bps, however, this will have an impact on sentiments of producers and consumers, as cost of funds is going up month after month. As inflation is cooling down significantly, calibrated approach to maintain economic growth would be vital to attract investments."
Saket Dalmia said efforts to rejuvenate demand and producers' sentiments for enhanced production would be crucial at this juncture.
Mehta also added, "While the consumer price index CPI inflation projection has been maintained at 6.7 per cent for 2022-23 and some early signs of inflation cooling down on a sequential basis are coming to the fore, we need to see this trend emerge on a durable basis for RBI to indicate a change in stance."
"Furthermore, while the Indian economy remains resilient, the RBI has revised downward its GDP growth forecast for 2022-23 to 6.8 per cent from 7 per cent in the last monetary policy announcement," Mehta said, adding that, "Even at this slightly lower rate of growth, India continues to be amongst the fastest growing economies globally and we are encouraged by the Governor's statement that liquidity will be made available for productive activities as required so that the growth impulses get nurtured." (ANI)