Welcoming the cut in the repo rate by 25 basis points to 6 percent, Dr A.
Sakthivel, Regional Chairman FIEO said that it will trigger the hope of lower
borrowing costs for Industry and provide positive momentum in the present
gloomy economic scenario.
"Entire business community expected it, as the inflation is coming
down" Dr Sakthivel said. He urged the RBI Governor to take necessary steps
to see all Banks cut its lending rates immediately as there is scope for the
Banks to reduce interest rate further beyond RBI rate cut.
We expected a reduction of 50 basis points in key lending rate this time,
as inflation has cooled to record low level of 1.54 per cent in June. Inflation
in the previous month - May this year - was 2.18 per cent, June last year it
was 5.77 per cent, added Dr Sakthivel.
The economic growth unexpectedly slowed to its lowest in more than two
years. Manufacturing sector contracted in July following the GST, exporters are
facing serious working capital crunch and hence adequate availability of cheap
fund especially for MSME sector is need of the hour to make our products
competitive in the international market, Dr Sakthivel said.