Retaining repo rate is balanced, prudent decision amid global uncertainty: FICCI President
Welcoming the monetary policy announcement, the Federation of Indian Chambers of Commerce and Industry (FICCI) President Anant Goenka has said that retaining the repo rate at 5.25% and maintaining a neutral stance is a balanced and prudent decision taken by the Reserve Bank of India (RBI) given the heightened global uncertainty. He noted that maintaining policy stability at this juncture provides confidence to businesses and investors alike.
FICCI also welcomed the proactive regulatory measures announced by the Ministry of Finance and the RBI to strengthen external sector resilience and facilitate capital inflows. It said the decision to review the regulatory framework for Foreign Portfolio Investments in Government Securities along with rationalisation of taxes on such investments will deepen the G-Sec market and attract greater participation of FPIs in Indian government securities.
Besides, it said that in addition, the steps introduced by the RBI like introducing forex swap facilities, facility for bearing full hedging costs to banks for raising foreign currency deposits from NRIs and OCIs will incentivise foreign capital inflows and strengthen India’s external sector.
FICCI President further stated that ‘Today’s policy sends a reassuring signal that the government is dynamically utilizing its policy instruments to safeguard India's growth trajectory. By ensuring appropriate liquidity and introducing measures to support inflow of foreign capital, the government and the RBI are building a vital buffer against external volatility.’
