RBI urged to monitor delicate economic situation

Indian exporters want the government to announce immediately an economic package covering all the sectors of exports during the COVID-19 impact hit global economies.

Making the exporters’ call, FIEO President Sharad Kumar Saraf wants implementation of the economic measures announced at the ground level for quick and early starting of trade and businesses across the country during such difficult and testing times.

He also suggested that RBI should continuously monitor the delicate economic situation and make pragmatic announcements after every two months interval.

Saraf also welcomed RBI’s repo and reverse repo rate cut of 40 basis points on 22 May 2020 which will allow more liquidity in the hands of the exporters thereby helping them in fulfilling their overall export obligation during such difficult and testing times.

“We are ushering into an era of very competitive credit rates to help manufacturing and overall economy,” said FIEO President Sharad Kumar Saraf welcoming the repo rate cut.

Policy rates cut, extended moratorium along with pre & post shipment credit extension by RBI are much-needed welcome step during such challenging times, he said.

The RBI’s extension in the moratorium period for another three months till 31st August, 2020 along with the extension of the pre and post shipment credit for the exports sector from existing 12 months to 15 months has come as a much-needed respite for the overall exports sector, he felt.

The above measures will not only help in revival of growth but will also help in mitigating the impact of Covid-19 while ensuring that the inflation remains within the target range, observed Saraf on 22 May 2020.

Besides steps taken with regard to outward remittance for imports being extended from 6 months to 12 months, will help importers as they will have the longer repatriation period.

The Rs.15,000 crore line of credit to Exim Bank for Dollar Swap facility will help in leveraging long term and project exports as a “marketing tool” as buyers would be more willing to buy products from the seller.

The self-sufficiency on Forex Reserve front with US$487 billion equivalent to one year of imports is quite a good sign for the economy, he said.

Further RBI’s assessment of the economic revival during the first half remains bleak with signs of revival to be only seen during the second half of the financial year, said the FIEO President. fiinews.com

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