Maintaining status quo in policy rates by RBI, to further provide boost to growth momentum and contain inflation: Dr A

NEW DELHI: Reacting to RBI’s policy rates being kept unchanged at 6.5%, goes to show the resolve of the Reserve Bank of India to further provide growth momentum to the economy and contain inflation, said Dr A Sakthivel, President, FIEO. WithUSFedalsoexpectedtokeeptheir 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, added Dr Sakthivel. RBI feels that the MPC decision is focused towards the objective of achieving medium-termtargetofconsumerprice index(CPI)inflationof4percentwithin

Sakthivel, President, FIEO

abandof+/-2percent,whilesupporting growth,reiteratedFIEOChief.

The decision to keep policy rate unchanged will further give boost to growth through increasing investments. 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 forecastforFY24at6.5percent.

President, FIEO said that the increasing investment will lead to further production and easing of supply thus reducing inflation in coming months. Dr A Sakthivel also added 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 interestsubventionfrom2%and3%to 3% and 5% respectively. The resilient external sector growth backed by financial sector push has further giventhrusttotheeconomy.

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