Welcoming the RBI's move to keep the borrowing costs unchanged on Friday, India Inc said the central bank has maintained a fine balance to support growth as well as keep inflation within the target range amid geopolitical worries.
The Reserve Bank of India (RBI) kept borrowing costs unchanged at a record low for the 11th time in a row in a bid to continue supporting economic growth despite inflation edging higher in the aftermath of Russia's war in Ukraine.
RBI's six-member Monetary Policy Committee voted to hold the benchmark repurchase or the repo rate at 4 per cent, Governor Shaktikanta Das said.
The panel decided to stick to an accommodative stance “while focussing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth”.
Sanjiv Mehta, President, FICCI said, ''The statement does allude to a withdrawal of accommodation clearly signaling towards normalization of liquidity management to ensure inflation remains within target.
''There has been a considerable change in the economic scenario since the last policy announcement and we were expecting that the Central Bank will take due cognizance of the current situation''.
He observed that significant escalation in geopolitical stress since end February 2022 is undermining global recovery and some impact on India will be inevitable.
Assocham said the Monetary Policy Committee has struck a fine balance with a nuanced approach to encourage growth while calibrating inflationary pressures and defend the Indian economy by navigating the current geo-political storm with resolute response.
''The accommodative stance by the RBI is in line with the PHD Chamber's expectations to strengthen and support the business and consumer sentiments as well as the economic recovery,'' said Pradeep Multani, President, PHD Chamber of Commerce and Industry.
(With inputs from PTI)
