Tirupur Exporters' Association today hailed the RBI's move of slashing repo rate by 25 basis points to 6.5 per cent, saying it was of paramount importance for the export units to enhance competitiveness in the subdued world trade.
The reduction announced by RBI Governor Raghuram Rajan in the first bi-monthly Monetary Policy statement for 2016-17 is a welcome step, TEA President A Shaktivel said t
The introduction of the Marginal Cost of Funds based Lending Rate (MCLR) should improve transmission and magnify the effects of the current policy rate cut which was of paramount importance for the exporting units to enhance their competitiveness in the subdued world trade, he noted.
Shakthivel also welcomed the RBI stance in monitoring the developments closely to contain any unanticipated forex market volatility and added that the sudden higher fluctuations will put the exporting units, particularly SME units, into quagmire position if the RBI was not intervening immediately.
(Reopens MCM14)
Meanwhile, the local chapter of Indian Chamber of Commerce and Industry also welcomed the reduction of Repo Rate by 25 basis points and retention of CRR at 4 per cent.
"The move, we feel will give a good push to cheaper home and auto loans.
Borrowing cost is likely to come down with RBI resuming the process of Monetary Easing by lowering the repo rate by 25 basis points in line with market expectations and ensuring easy liquidity for banks," Chamber president, D Nandakumar said.
Stating that the cut in policy rate will also help individual and corporate borrowers while making other loans cheaper, he said the policy focused on significant transmission rate cuts in the next few months.
