RBI's balanced policy stance to bolster growth, investment sentiment: PHDCCI
New Delhi, Aug 5
The Reserve Bank of India's decision to keep the policy repo rate unchanged at 5.25 per cent reflects a balanced approach to managing inflation risks while supporting economic growth amid global uncertainties, industry body PHD Chamber of Commerce and Industry said on Wednesday.
Reacting to the Monetary Policy Committee's (MPC) decision, PHDCCI President Rajeev Juneja said the central bank's move comes at a time when inflation remains within the target range, although risks persist from geopolitical tensions, global energy prices and deficient monsoon conditions linked to El Nino.
"The Indian economy remains resilient, boosted by domestic demand, sustained manufacturing activity, strong capacity utilisation, robust credit flow and the government's continued thrust on infrastructure," Juneja said.
He added that while services exports are expected to remain strong, merchandise exports would benefit from recent trade agreements and efforts to diversify export markets.
According to the industry chamber, key banking sector indicators remain healthy, with system liquidity continuing to remain in surplus.
Credit growth has remained broad-based across sectors, while foreign exchange reserves are adequate to support macroeconomic stability, it added.
In addition, PHDCCI welcomed the RBI's additional measures aimed at strengthening the cooperative banking sector, including draft guidelines for resuming the licensing of urban cooperative banks and a review of the credit monitoring framework for rural cooperative banks.
"The policy reflects a balanced view of upside risks facing the economy. While global uncertainties continue, RBI's decision responds appropriately to macroeconomic developments," said Dr Ranjeet Mehta, CEO and Secretary General of PHDCCI.
He added that the MPC's continued focus on inflation management alongside growth would support economic activity and help sustain India's position as the fastest-growing major economy in the world.
According to the chamber, the central bank's decision is expected to provide stability to businesses and investors while supporting the economy's growth momentum amid evolving global and domestic challenges.
— IANS
Reader Comments
Finally a sensible decision! As a home loan borrower, I was worried about EMI hikes. This pause gives us some breathing space. Hope the RBI continues this balanced approach.
The RBI deserves credit for navigating global uncertainties while keeping our economy on track. But I wish they'd addressed the El Nino impact on food prices more directly. Still, overall a pragmatic stance. 👏
Interesting to see India's monetary policy from abroad. The RBI seems to be striking a careful balance. The focus on cooperative banks is a thoughtful addition—many countries overlook that sector.
While stability is good, I feel the RBI could have been slightly more aggressive in supporting growth. Small businesses are still struggling with working capital. Hope the next review considers that.
Impressed by India's economic resilience. The RBI's approach seems well-calibrated. The focus on urban cooperative banks licensing is a step toward financial inclusivity. Good to see.
As someone saving for my kids' education, stable rates are reassuring. But I would've liked a small cut to boost the stock market further. Anyway, the RBI knows best. Good decision overall! 😊
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