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Coimbatore
RBI’s repo rate cut cheers exporters
April 5, 2016
Much to the disappointment of the market observers, the stock market barely noticed the Repo Rate cuts announced by the RBI, but the Tirupur Exporters’ Association (TEA) reacted jubilantly. The RBI has announced a reduction of the Repo Rate by 25 basis points from 6.75 per cent to 6.5 percent with immediate effect.
In a statement TEA president, A. Shaktivel said that the reduction, announced by RBI Governor Dr. Raghuram Rajan in the first bi-monthly Monetary Policy statement for the year 2016-17, was a welcome step.
He pointed out that, as mentioned in the policy, the introduction of the Marginal Cost of Funds based Lending Rate (MCLR) should improve transmission and magnify the effects of the current policy rate cut, which was very important for the export units.
Shakthivel also welcomed the RBI initiative to monitor the forex market to handle unexpected fluctuations. Such developments, if unobserved, invariably take a huge toll on the SMEs and the export units.
