India should maintain an accommodating interest rate policy: ASSOCHAM

India should maintain an accommodative interest rate policy, for as long as necessary, to further sustain and accelerate the pace of economic growth, so that the respite from Covid 19 cases is fully taken advantage of in a still global scenario. marked by concerns about the pandemic and high energy prices, said the industrial body ASSOCHAM on Wednesday.

“While concerns about inflation, particularly in the Wholesale Price Index (WPI), need to be addressed, measures other than reversing the accommodative stance should be encouraged. The RBI and its Monetary Policy Committee (MPC) have done a commendable job of keeping policy rates current. However, the central banks of some developed economies are moving towards a reduction in accommodative policies. We are sure and as we have maintained that the RBI would not follow this model and continue with low interest rates, ” ASSOCHAM Secretary General Mr. Deepak Sood said.

He said low interest rates and several other proactive measures by the Reserve Bank of India and the government under Prime Minister Narendra Modi’s flagship Atma Nirbhar program have helped India weather the Covid storm. 19. These policies, coupled with bold economic reforms in defense manufacturing, divestment, the domestic monetization pipeline have helped overall corporate sentiment, with the result that FY22 GDP growth is expected to reach the two-digit digit ”.

The global initiative of the major importing and consuming countries of crude oil, including the United States and India, is expected to lead to increased global supplies and lower prices. Brent crude prices have already retreated to $ 80 or less per barrel, after peaking at $ 85 per barrel.

“Crude oil prices are falling for a variety of reasons. What is considered important is a well-coordinated approach among major consuming countries, including India, to exert pressure on oil producing and exporting countries. This seems to be bearing fruit, ”said the secretary general of ASSOCHAM.

He said that although the Indian economy is on a fast recovery track, our capacity utilization is still around 70 percent. Some of the supply issues are being resolved even as the global value chain should be further streamlined. It is true that the banks are overflowing with liquidity, but the demand for credit has not yet recovered, especially for private investment. We are also seeing this happening, but any reversal of the accommodative stance of interest rates could dampen a faster recovery in investment, ”he added.

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