Trade bodies urge RBI not to hike key rates, CRR
Days ahead of the annual monetary policy, trade bodies on Tuesday urged the Reserve Bank not to hike its key-rates as they fear a further tightening could push lending rates up and thus hamper growth.business Updated: Apr 06, 2010 19:40 IST
Days ahead of the annual monetary policy, trade bodies on Tuesday urged the Reserve Bank not to hike its key-rates as they fear a further tightening could push lending rates up and thus hamper growth.
"We have requested the Reserve Bank to maintain a status-quo in the key rates and in the cash reserve ratio, as this (hike in RBI rates) would lead to higher lending rates, which would further impact our business," Federation of Indian Export Organisations, president, A Sakthivel said.
Reserve Bank, which is gradually exiting its accommodative policy stance as the recovery is taking hold, hiked its cash reserve ratio (banks' mandatory deposits with RBI for zero interest) to 5.75 per cent in January, and is widely expected to hike short-term rates this month.
The apex bank will announce its annual monetary policy for 2010-11 on April 20.
Exporters, who were hugely hit by the global financial crisis, also asked the central bank to fix the value of US Dollar against Rupee at Rs 47-50 to face the volatility in the market. They also informed the apex bank about their difficulties in availing foreign currency loans.
"Exporters are facing issues to avail dollar loans from the banks, who find large corporates as safe borrowers compared to us. We have requested the central bank to direct banks ensure adequate credit-flow to the segment," Sakthivel said.