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16 July, 2019 11:36 IST
RBI's change in Monetary Policy Stance is a welcome beginning: FICCI
Source: IRIS | 08 Feb, 2019, 10.30AM
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The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy statement for 2018-19 decided to cut repo rate by 25 basis points (bps) to 6.25 per cent.

The RBI said, ''On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5 per cent to 6.25 per cent with immediate effect.

''Consequently, the reverse repo rate under the LAF stands adjusted to 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.5 per cent,'' it added.

Commenting on the Monetary Policy announcement by RBI earlier today, Sandip Somany, President, FICCI said "It is a welcome beginning and we are happy to note that RBI?s MPC has decided to change the stance of Monetary Policy from calibrated tightening to neutral. There is also a firm recognition of the need to strengthen private investment activity and buttress private consumption. While FICCI had hoped for a larger cut in the repo rate, we believe that the cut of 25 basis points will be followed up with more such measures in the subsequent months."

"The Interim Union Budget presented earlier this month contained a series of measures that would aid growth. The need of the hour is for monetary policy to complement the fiscal policy and strengthen the growth impulses that are slowly building in the economy. This is important as we do not foresee much impetus coming from external sources of growth as the global economy continues to show signs of moderation. In such a scenario, all levers must be used to strengthen India's domestic economy through greater consumption demand and investments. FICCI hopes that the indication given by RBI today will soon be translated into lower lending rates by banks for both retail and corporate loans," added Somany.

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