MADURAI: The consecutive increase of repo rate by 0.35% in FY 2022-23 will affect trade, especially MSMEs and industrial investments, said the Tamil Nadu Chamber of Commerce in a press release. Dr N Jegatheesan, chamber president, said the Reserve Bank of India (RBI) has hiked the repo rate from 5.90 per cent to 6.25 per cent for the fifth consecutive time during its Monetary Policy Committee (MPC) meeting this month.
"At a time when crude oil prices are falling sharply in the international market, this comes as a shock. There is no improvement in the GDP ratio of the country. While RBI has reasoned that the hike is to contain inflation, it is to be noted that due to these measures, interest on loans disbursed by banks has increased so far and liquidity has come down drastically, affecting the trade, but there is no evidence that inflation have come down," he said.
Jegatheesan added that the union government should take initiative to increase investment in the trade and industrial sector to control inflation. "This will increase productivity and create employment opportunities for the youth. The government should adopt new strategies in the agriculture sector to increase production ensure the produce are not wasted. Focus should be on the education and health care sector and monitor the global trends for the economic stability of the country," he added.