Exporters feel let down by RBI credit policy review: EEPC India.

KOLKATA: The exporters community, especially in the manufacturing sector, is feeling let down by the continuance of high interest regime by the RBI in its unsuccessful bids so far to check inflation. EEPC India feels inflation is rising because of the supply issues, especially the inefficiencies in the supply chain.

The core inflation is quite lowand the RBI should have taken a cue from this figure which reflects how the entire industrial sector is going through painful period of demand slowdown.

High interest rates, coupled with high inflation is adding to the pressure on the cost of manufacturing and making Indian exports uncompetitive in the international market. We cannot always depend on the currency depreciation for making our products competitive. The structural issues arising from the high cost economy must be addressed first.

In this direction, the exporters community has been seeking a special dispensation for lower interest rates. The credit to exporters should be treated as priority sector lending so that banks are enthused to lend to the sector which is so crucial for India's current account deficit.

By revising upward the repo rate, RBI 's obsession with inflation continues and the growth suffers in the trade-off.

Source : economictimes.indiatimes.com