Hyderabad, Oct 4: Reserve Bank of India (RBI) decision to cut benchmark interest rates for the fifth time was to support fiscal measures announced by the Union Government to boost growth, Federation of Indian Export Organisation (FIEO) President Sharad Kumar Saraf said.
In a statement here on Friday, Mr Saraf said that the RBI reduced its key lending rate (the repo rate) by 25 basis points to 5.15 per cent, which takes cumulative cuts so far this year to 135 bps.
The FIEO President said that RBI has rightly acknowledged the challenges faced by the global economy as both advanced as well as emerging markets are showing weakening demand and contracted manufacturing. WTO has already significantly cut its forecast for the global trade growth to 1.2% for 2019. The challenges in exports will continue and may aggravate with geo-political situation. Mr Saraf urged the Government to ensure that various fiscal stimulus announced by the Government are put into operation so that the benefit flows down to the industry.
He said that reduction in the credit rates will further encourage investment both by the domestic companies as well as by FDIs since Corporate Tax rate in India is now amongst the best in the world. He, however, urged the banks to ensure that the cut in the rates by RBI are adequately reflected in the lending rates of the bank so that private investment may be encouraged and consumer loans may get a push to help various segments of the economy. (UNI)