RBI’s balanced policy stance to bolster growth, investment sentiment: PHDCCI
New Delhi, Aug 5 (IANS) The Reserve Bank of India’s decision to keep the policy repo rate unchanged at 5.25 per cent reflects a balanced approach to managing inflation risks while supporting economic growth amid global uncertainties, industry body PHD Chamber of Commerce and Industry (PHDCCI) said on Wednesday.
Reacting to the Monetary Policy Committee’s (MPC) decision, PHDCCI President Rajeev Juneja said the central bank’s move comes at a time when inflation remains within the target range, although risks persist from geopolitical tensions, global energy prices and deficient monsoon conditions linked to El Nino.
“The Indian economy remains resilient, boosted by domestic demand, sustained manufacturing activity, strong capacity utilisation, robust credit flow and the government’s continued thrust on infrastructure,” Juneja said.
He added that while services exports are expected to remain strong, merchandise exports would benefit from recent trade agreements and efforts to diversify export markets.
According to the industry chamber, key banking sector indicators remain healthy, with system liquidity continuing to remain in surplus.
Credit growth has remained broad-based across sectors, while foreign exchange reserves are adequate to support macroeconomic stability, it added.
In addition, PHDCCI welcomed the RBI’s additional measures aimed at strengthening the cooperative banking sector, including draft guidelines for resuming the licensing of urban cooperative banks and a review of the credit monitoring framework for rural cooperative banks.
“The policy reflects a balanced view of upside risks facing the economy. While global uncertainties continue, RBI’s decision responds appropriately to macroeconomic developments,” said Dr Ranjeet Mehta, CEO and Secretary General of PHDCCI.
He added that the MPC’s continued focus on inflation management alongside growth would support economic activity and help sustain India’s position as the fastest-growing major economy in the world.
According to the chamber, the central bank’s decision is expected to provide stability to businesses and investors while supporting the economy’s growth momentum amid evolving global and domestic challenges.
–IANS
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