Representatives from the chambers of commerce and industry have urged the Reserve Bank of India to reduce the interest rate and reserve ratio in order to boost the growth. The industry chambers, in the meeting with the RBI Governor Shaktikanta Das, proposed measures to relax the tight liquidity situation and reduce the high cost of credit in the light of consistently falling inflation.
These suggestion includes cutting cash reserve ratio by at least 50 basis points which will increase the flow of credits in the industry, which will benefit the MSMEs the most. The cash reserve ratio, which is the percentage of deposits kept as reserves with the RBI, is currently kept at 4 per cent.
The Federation of Indian Chambers of Commerce and Industry also proposed the RBI to consider a possible cut in repo rate and CRR to enable the banks to lower the lending rates in order to revive the investment cycle in the country and also boost the consumption and support growth.
FICCI President Sandip Somany said, “The need of the hour is to have an accommodative monetary policy, focussing on growth. The objectives of the Monetary Policy Committee should not be restricted to only price stability but also to consider growth and exchange rate stability.”
The RBI sixth bi-monthly monetary policy statement for 2018-19 is scheduled to be announced on February 7.