Shakthikanta Das, Governor, RBI on 6th June 2019 announced Second Bi monthly Monetary Policy for the year 2019 -20 and noted the decision of Monetary Policy committee to reduce the policy repo rate by 25 basis points from 6 per cent to 5.75 per cent.
Raja M Shanmugham, President, Tiruppur Exporters’ Association after hailing the reduction of policy Repo Rate by 0.25 per cent from 6 per cent to 5.75 per cent, said the Monetary Policy Committee decision to change the Monetary policy stance from Neutral to accommodative gives confidence that there would not be any interest hike in the near future.
Shanmugham said the monetary policy statement pointed out that Transmission of the cumulative reduction of 0.5 per cent in the policy repo rate in February and April 2019 was 0.21 per cent to the Weighted Average lending rate (WALR) on fresh rupee loans and also mentioned that the WALR on outstanding rupee loans increased by 0.04 per cent as the past loans continue to be priced at high rates. Considering the industries requirements, he appealed to all banks to come forward to pass on the reduction of interest rate to the borrowing units, which is desperately required for the knitwear garment exporting units, particularly to MSME exporting units which are suffering further to macroeconomic changes. He further said the reduction of interest will pave way for the growth of investment and exports.
