SME Times is powered by   
Search News
Just in:   • Sensex sheds 382 point over profit booking, crude oil prices  • Weak rupee benefited Infosys in Q2: CFO  • JSW Energy's Himachal hydro plants unaffected by recent heavy rains  • Investment cycle rising since 2016, to last till 2022: RBI  • Centre working to achieve zero hunger by 2030: Minister 
Last updated: 12 Jun, 2018  

RBI.Thmb.jpg RBI's surprise rate-hike

RBI.9.jpg
   Top Stories
» Investment cycle rising since 2016, to last till 2022: RBI
» Workshop on health of GeM organized
» Rupee slide not helping exports sector: Drip Capital CEO
» Naidu leaves for Belgium to attend 51-nation ASEM summit
» 45 Indian cos taking part in Expo Cihac in Mexico
Bikky Khosla | 12 Jun, 2018

The Reserve Bank of India (RBI) last week increased the repo rate by 25 basis points to 6.25 percent. This is the first rate hike since the NDA government came to power in May 2014. The decision by the six-member monetary policy committee (MPC) of the central bank came as a big surprise. The broader market expectation was that rates would be held this time while the stance may me revised from 'neutral' to 'tighten'. Instead, RBI went for a rate hike, retaining the 'neutral' stance.

The unanimous rate-hike decision by the MPC was clearly in the background of upside risk to inflation projections. Retail inflation was pegged at 4.8-4.9 percent for April-September of 2018-19 and 4.7 percent for the second half. Additionally, fresh indication on the robustness of domestic growth revival seem to be another major factor behind this decision, with the central bank now projecting GDP growth in the range of 7.5-7.6 percent in the first half and 7.3-7.4 percent in the second half, with risks evenly balanced.

Industry reaction to the decision seems mixed, with some sections viewing that the decision was based on the ground realities and positive sentiments in the economy. Reforms like GST, Bankruptcy Code and RERA have already paved a smooth way for the economy and now the RBI stance would boost the animal spirits of the industry. Also, the forecast of monsoon is very healthy and if food prices ease, the central bank would be able to revert to their benign stance on interest rates. However, the concern of high interest rates is raised by some sections.

Meanwhile, in a welcome decision RBI has eased loan-repayment norms for the micro, small and medium (MSME) sector. Under the relaxed norms, eligible MSME accounts, which were standard as on August 31, 2017, shall continue to be classified as standard by banks and NBFCs "if the payments due as on September 1, 2017 and falling due thereafter up to December 31, 2018 were/are paid not later than 180 days from their original due date. This is a welcome decision, which will give a big relief to MSMEs that have been affected due to implementation of the GST.

I invite your opinions.

 
Print the Page Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

Repro rate increase
Kunnakkattu J | Fri Jun 15 00:23:22 2018
This is a clear message Indian economy is worsened. For more money the interest rate to be reduced, for business more money needed at low rate of interest.


 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 17 Oct, 2018
  Daily Poll
Is counterfeiting a major threat to SMEs?
 Yes
 No
 Can't say
  Commented Stories
» Starting an import export business: Basic guide for beginners(8)
» Letter of Credit - a safe and secure payment mode?(1)
» Punjab to give unique number to plots of land to prevent frauds(1)
» Ashok Leyland to launch 13-seater passenger vehicle, LCV(1)
» Nearly 80 pc of Indian startups are unsuccessful: Survey(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter