NEW DELHI: India Inc has welcomed RBI's resolve to continue with an accommodative monetary policy stance and focus on reviving growth.
RBI's six-member Monetary Policy Committee on Friday voted unanimously to retain the repo rate at 4 per cent while keeping its policy stance accommodative.
The central bank sees the economy contracting 9.5 per cent in the current fiscal. CII Director General Chandrajit Banerjee said additional measures announced by RBI to support growth in the form of liquidity support, reviving exports, credit support, and improving ease of doing business are expected to give the much-needed impetus to drive the 'three-speed' recovery which the central bank expects.
Ficci President Sangita Reddy said while the policy repo rate was not cut by RBI, several other measures were announced that should help bring down interest rates in the market.
Assocham Secretary General Deepak Sood said RBI Governor Shaktikanta Das' "dared to be optimist" approach shows his steely resolve to face the unprecedented situation arising out of the COVID-19 pandemic.
What is notable in this edition of RBI's monetary policy announcement is its emphatic commitment to 'public good' and its intent to remain accommodative for such public good.
These are welcome words in support of an economy that is looking to rebound from a pandemic," said Ashutosh Bishnoi, MD & CEO at Mahindra Manulife Mutual Fund.
Reliance Home Finance CEO Ravindra Sudhalkar said RBI's stance to rationalize risk weightage on home loans is a welcome move.
"With all new housing loan risk now linked only to loan to the value, the rates will continue to be in check and hence encourage new buyers," he added.
Sunteck Realty CMD Kamal Khetan said the announcement of rationalizing risk weightage on home loans is a targeted intervention and comes at a time when the property sector is making significant recovery across all segments.
"With rates remaining unchanged, higher inflation is certainly a matter of concern. We are expecting better revival of business in smaller towns basis RBI's expectation of further strengthening of rural economy," Spykar Lifestyle CEO Sanjay Vakharia said.
Stating that RBI stands ready to take further measures on liquidity, Governor Shaktikanta Das announced Rs 1 lakh crore of targeted long-term funds with tenors of as much as 3 years from the central bank to banks for investing only in corporate bonds, aimed at easing cash crunch at firms.
Das said the economic growth, which slumped to a negative 23.9 per cent in April-June , will turn positive only in the final March quarter.
For exporters hit by the pandemic, RBI discontinued the system-based automatic caution-listing to allow them to realise export proceeds. The central bank has slashed the repo rate by 115 basis points since late March to support growth.