Rate cut was expected to boost industrial activity: PHD Chamber

While welcoming the RBI’s status quo move in Second Bi-monthly Monetary Policy of 2017-18, Mr. Gopal Jiwarajka, President, PHD Chamber of Commerce and Industry said that a rate cut was expected from the RBI as inflation is in the comfortable zone and supply side is expected to improve with a good monsoon on the cards as forecasted by India Meteorological Department (IMD).

RBI has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25% in Second Bi-monthly Monetary Policy of 2017-18, the reverse repo rate under the LAF at 6% and marginal standing facility (MSF) rate and the Bank Rate at 6.5%.

However, reduction in the risk weight on certain categories of housing loans sanctioned on and after today would encourage the housing sector demand, said Mr. Jiwarajka.

The growth in industry output, as measured in terms of IIP at 5% (FY2017) needs to be accelerated to the level of 9-10% with vital measures for the employment generation in the economy, said Mr. Jiwarajka.

Going ahead, we expect repo rate to the level of 5.75% by the end of December 2017 and adequate availability of credit to the industry especially to the MSMEs sector, he said.