RBI holding rates is on expected lines: India Inc

New Delhi, Dec 1 (IANS) India Inc on Tuesday termed the Reserve Bank of India’s (RBI) move to hold policy rate at 6.75 percent as on expected lines.

“The RBI’s decision to maintain status quo was in line with expectations, given that there has already been a reduction of 50 basis in the last policy,” Confederation of Indian Industry director general Chandrajit Banerjee said in a statement here.

“The focus has now shifted to the transmission of lower policy rates to banks’ lending rates. CII is happy to note that the RBI intends to maintain an accommodative policy stance,” he said.

ICICI Bank chief executive Chanda Kochhar said: “As the impact of monetary policy measures taken so far play out in terms of bank funding costs, lending rates are expected to continue to moderate.”

“The central bank has expressed strong confidence in the government’s commitment to fiscal consolidation,” she added.

State-run State Bank of India chairman Arundhati Bhattacharya said: “Governor’s indication of being accommodative policy sends a positive signal for Indian economy.”

“The guidelines on the base rate calculation based on marginal cost of funds will be watched and appropriate actions will be taken on the same,” she said in a statement.

American firm Fitch group subsidiary India Ratings and Research (IRR) also said the RBI action was on expected lines.

“By front loading the cut in the previous policy (50 basis points in September) it had given enough indication that further rate cuts is unlikely to come in any time soon,” said IRR’s principal economist Sunil Sinha.

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