RBI to initiate cut in interest rate to give fillip to manufacturing and exports: M. Rafeeque Ahmed, President, FIEO
FIEO/PUB/PR /78/12 - July 24, 2012
RBI to initiate cut in interest rate to give fillip to manufacturing and exports: M. Rafeeque Ahmed, President, FIEO
Mr. M. Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) while commenting on the credit data released on the week ending 20th July, 2012 stated that while credit off-take has shrunk to 16.5% from 20% in the corresponding period last year, inflation as measured by the WPI came in at 7.25% for June as against RBI’s projections of 7.6% for the month despite higher food prices.
FIEO Chief stated that given the lower inflation figures and IIP of around 2.4% y-o-y calls for a immediate rate cut in the policy review slated for 31st July, 2012. A status quo position maintained by RBI as in the 18th June,2012 announcement or deferring a rate cut till October, 2012 could hit industry hard.
President, FIEO suggested given the scenario of global slowdown, If rates are not lowered by RBI ,Government should subsidize cost of export credit by 4- 5% to all sectors as against 2% presently to select sectors in the interest subvention window and the period of realization of export proceeds be extended to 2 years as against present Master Circular on exports which allows realization period to be 1 year and that to till 30th of September, 2012.
