Opportune time for a rate cut: FIEO
Author(s): City Air NewsS C Ralhan. “As the third quarter would imply onset of busy season with systemic liquidity crunch hampering monetary policy transmission”, says FIEO President S C Ralhan Ludhiana, August 3, 2015: Mr S C Ralhan,...
cityairnews
Aug 3, 2015 12:30
0
S C Ralhan.
“As the third quarter would imply onset of busy season with systemic liquidity crunch hampering monetary policy transmission”, says FIEO President S C Ralhan
Ludhiana, August 3, 2015: Mr S C Ralhan, President, Federation of Indian Export Organsiations (FIEO) while commenting on the monetary policy announcement to be made on 4th August, 2015 stated that there has been much debate on whether the RBI would go for a rate cut this time given that there have already been three rate cuts since January, 2015.
FIEO Chief stated that the recent RBI data released on 24th July shows a fall in credit offtake from 13% to 9% and on the one hand the IIP data shows a cumulative growth at 3.0% for the period April-May, 2015-16 over the corresponding period of the previous year with manufacturing at 2.2% and cumulative growth in the sector during April-May, 2015-16 over the corresponding period of 2014-15 being 3.3% presenting a rather mixed picture.
President, FIEO stated that lower global fuel prices and their pass through to domestic retail prices and a favourable base effect for food inflation are likely to ease headline Consumer Price Index(CPI) – based inflation, which is taken as a barometer to fathom stance of monetary policy, suggests that a further reduction of 25bps in the repo rate could be considered since a cut in the next policy would imply that the beginning of the busy season for credit offtake when systemic liquidity tightens and hampers the transmission process.
Date:
Monday, August 3, 2015
