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Pause in rate cut by RBI disappoints EEPC

Sehgal said it is a matter of regret that the banks have not even passed on the earlier cuts.

, ET Bureau|
Dec 05, 2019, 03.50 PM IST
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The EEPC chairman said, the policy statement of the RBI itself acknowledges the fact that the global economy is not in the best of environment and how Indian exports have been declining
Pause in the interest rate reduction by the Reserve Bank of India in its monetary policy review today has come in as a disappointment for exporters because they are up against very difficult global trade environment and the cost of borrowing is a major drain on them, said EEPC India chairman Ravi Sehgal.

The EEPC chairman said, the policy statement of the RBI itself acknowledges the fact that the global economy is not in the best of environment and how Indian exports have been declining. " In this backdrop , it is paramount that the interest rates should be much lower than the prevailing rates being charged by the bank. In fact, for the SMEs, the actual interest works out to be much higher than the benchmark rates", he said.

Sehgal said it is also a matter of regret that the banks have not even passed on the earlier cuts. "Banks have not passed the rate cuts announced since February by even half of 135 basis points effected by RBI. Urgent action is needed to effect transmission of lower interest rates", he added.

He said Indian exporters, are in any case suffering from high input costs and the global trade tensions are having a toll on the shipments. Under these circumstances, they need support both from the government and the RBI.

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