The RBI MPC held the repo rate at 4 per cent and retained the ‘accommodative’ stance in its first policy review of the new fiscal. Commenting on this, Dr. Niranjan Hiranandani, National President, NAREDCO said, “The unchanged repo rate by the RBI MPC which signals to keep the borrowing momentum buoyant. Also, pegging the real GDP forecast at 10.5 percent reflects Indian economic recovery to be healthy, self-sustainable and resilient.
“An additional liquidity facility of Rs 500 billion to all India financial institutions like NABARD, NHB and SIDBI augurs well towards fuelling sustainable growth measures. On the issue of keeping markets ‘in sync’ with its policies, the RBI has done well to convince the market about its stance on growth and liquidity management,” he added.
“The guidelines on inflation and growth trajectory have mostly remained unchanged despite recent surge in input costs. Extending LTRO for six months translates into continued emphasis on maintaining balanced liquidity in the system by and introducing secondary market G-sec acquisition program 1.0 certainly clearly reflects the commitment to sustain growth momentum in the economy. Extension of Priority Sector lending for NBFC financing towards housing will augment the production outlay ,” he concluded.