RBI repo rates: Exporters seek special window
Exporters on Tuesday sought a special dispensation from the RBI for lower interest rates to help them tide over the persisting weak external demand.
Welcoming the 25-basis point cut in the benchmark interest rates, the Engineering Export Promotion Council India Chairman T.S. Bhasin said a special dispensation should be considered by the RBI to boost exports in the wake of continuing sluggishness in overseas markets, so well enunciated in the credit policy document itself.External weakness
“The policy document has elaborately talked about the risks to the macro economy from slackening of external demand and other issues (including) protectionism,” he said. “Under these circumstances, Indian exporters, especially from the employment oriented engineering (sector), suffer due to high cost of production, with the situation aggravated by (government-imposed) restrictions on imports on steel, the basic raw material.”
It was up to the banks now to pass on the benefits of the reduction in repo rate to the industry, said S.C. Ralhan, President, Federation of Indian Export Organisations (FIEO) . The benefits of the recent cuts should reduce rates by at least by two percentage points for about a third of those seeking loans in the current fiscal year.
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