IMC Appreciates RBI Stance of not disturbing Growth Momentum

Mumbai, Jul 31 (UNI) Mr Niraj Bajaj, IMC President, today said that by taking recourse to only one main measure, ie, CRR hike to the extent of 50 basis points, RBI has indicated that it does not want to disturb the growth momentum, which in recent months has started hoisting some disturbing signals.

Reacting to the monetary policy, Mr Bajaj said appropriately, RBI has shifted its focus from controlling inflation to managing excess liquidity in the system.

''Though a major relaxation in monetary tightening was demanded by industry, in view of prevailing uncertainty on two fronts--oil prices and agricultural situation-- RBI could not take any risk by liberalizing its earlier monetary stance'', he said.

The demand for monetary relaxation was based on the belief that the declining non-food credit off take, appreciating rupee and high interest rates would impact investment rates which, in turn, would reduce the pace of economic growth in India and also impact exports due to erosion of profit margins. In case of exports, the government, in any case, is independently taking some redressal measures. But in case rupee appreciation becomes sharp, RBI is likely to intervene, Bajaj said.

UNI