New Delhi, December 6 (IANS). SBI and IBA Chairman Challa Srinivasulu Shetty said on Saturday that the decisions taken by the central bank RBI in the recent Monetary Policy Committee meeting give a clear and confident message that the country’s economy remains strong and the pace of growth remains fast with low inflation.
He further said that raising India’s GDP growth forecast for the current financial year from 6.8 percent to 7.3 percent shows that the RBI remains optimistic.
“The decision to cut interest rates and maintain the possibility of future cuts helps insulate the economy from possible unexpected shocks or external headwinds,” Shetty said.
He further said that this move by RBI strengthens the structural drivers for a long-term higher growth path by boosting investment, credit and consumption.
Meanwhile, liquidity-management measures are aimed at keeping money-market rates stable and reducing borrowing costs, he said.
“The rate cut, neutral stance and targeted liquidity interventions are aimed at maintaining economic momentum while maintaining price and financial stability,” Shetty said.
In the December monetary policy committee results, RBI reduced the repo rate by 25 basis points from 5.5 percent to 5.25 percent to boost the country’s economy in the current financial year.
Meanwhile, a latest report by SBI Research said that after registering strong gross domestic product (GDP) growth rates of 7.8 percent and 8.2 percent respectively in the first and second quarter of the current financial year, India will grow at more than 7 percent in the remaining two quarters. Along with this, SBI Research has estimated the overall GDP growth rate for the current financial year to be 7.6 percent.
–IANS
SKT/