Captains of industry welcome Repo rate hike

Mumbai/New Delhi, Sept.21 (ANI): Captains of Indian industry have welcomed Reserve Bank of India (RBI) Governor Raghuram Rajan's decision to hike the Repo rate and keep CRR unchanged while announcing his maiden policy review.

Rajan raised the Repo rate by 25 basis points (bps) to 7.50 percent, defying widespread forecasts that he would leave the rate on hold to bolster a sluggish economy, and as expected struck a hawkish tone.

Reacting to the move, the vice-president of Federation of Indian Chambers of Commerce and Industry (FICCI), Sidharth Birla, said: "I think, first of all, we are happy to see a positive stance, overall in terms of emotions by Mr. Rajan. Certainly, we expected more, and the expectation of the industry was that the repo rate would go down and measures would be taken to provide more liquidity to the industry, really speaking bringing about a change in sentiment."

"So, to that, I would say that we are partially disappointed, but I think he has very clearly enumerated a number of reasons as to why he has done, what he has done," Birla added.

Meanwhile, market experts in Mumbai said that it would be interesting to see whether banks increase lending rates, as the cost of funds would come down for the banks.

"He (Reserve Bank of India Governor Raghuram Rajan), contrary to the belief, he increased so the market has again gone wrong. They were expecting the rates to be reduced, or if not reduced, status quo and some levy in CRR (cash reserve ratio). Here he has given some levy to CRR, an overnight rate but it is not much. But one thing is there, cost of funds will come down for the banks so one has to see whether the banks are increasing the lending rate or not," said market expert Sunil Shah in Mumbai.

Earlier in the day, the RBI partially scaled back the minimum cash balance requirement banks must keep with the central bank on a daily basis.

Headline inflation shot to a six-month high of 6.1 percent in August, hardening the case for Rajan to keep interest rates high.

India's record-high current account deficit made it especially vulnerable to the flight of funds from emerging markets that began in May on expectations the Fed would soon begin tapering its extraordinary stimulus.

Since Raghuram Rajan took office, the rupee had recovered more than 9 percent through Thursday, getting a further boost this week after the US Federal Reserve unexpectedly opted not to begin scaling back its stimulus programme.

Commenting on these developments, Rajan had said that domestic drivers of the rupee now take precedence. (ANI)

Matches

MORE TOP STORIES TODAY

Cleaning up the game starts with fans

Cleaning up the game starts with fans

... because, as recent events reveal, the BCCI has little intention of doing it. More »

Rajasthan square up to Chennai batting arsenal

Rajasthan square up to Chennai batting arsenal

Chennai have possibly the strongest top six in the current IPL, but Rajasthan have been buoyed by the return to form of their captain Shane Watson. More »

Hope to be fit for next game - Kevin Pietersen

Hope to be fit for next game - Kevin Pietersen

With two heavy defeats at the hands of Bangalore and Chennai, Daredevils currently languish near the bottom of the table. More »

'A blow to BCCI, could hurt autonomous status'

'A blow to BCCI, could hurt autonomous status'

The Supreme Court prefers that the Justice Mudgal panel further investigate the IPL corruption scandal. More »

Have the ECB played an unfair game?

Have the ECB played an unfair game?

Money talks, but it is in light of this ICC shakeup that the ECB's act of soliciting of another team's coach deteriorates from free-market aggression to… More »

Perfect Punjab trounce Hyderabad

Perfect Punjab trounce Hyderabad

IPL7, GAME 9—Maxwell (95, 43b), Balaji (4-13) set up 72-run win. More »

SC asks Mudgal committee to continue

SC asks Mudgal committee to continue

Mukul Mudgal has communicated to the court his willingness to take up the investigation and has been asked to specify the terms and modalities on April… More »

Farbrace quits for England post

Farbrace quits for England post

He will assist Peter Moores who was unveiled as the new England coach on Saturday. More »

Moin appointed to manage Pakistan team

Moin appointed to manage Pakistan team

Pakistan on Monday reappointed Moin Khan as chief selector and manager of the national team, a week after fellow former captain Rashid Latif turned down… More »

'BCCI reputation lowest in 80 years'

'BCCI reputation lowest in 80 years'

The former BCCI president says he was "disillusioned" by the happenings at the emergent working committee meeting on Sunday. More »

Injured Bravo to miss rest of IPL

Injured Bravo to miss rest of IPL

Dwayne Bravo is set to be sidelined for at least four weeks due to a shoulder problem. Bravo sustained the injury when attempting a catch on the boundary… More »

Chennai smash Delhi for first win

Chennai smash Delhi for first win

IPL7, MATCH 8—Raina-led middle order, superlative catching give CSK a 93-run win. More »

NZC contemplates domestic revamp

NZC contemplates domestic revamp

New Zealand Cricket has put forward a proposal to reinvent its domestic structure and allow up to 49% private investment into the six major associatio… More »

Punjab pull off another big chase

Punjab pull off another big chase

GAME 7, SHARJAH—Maxwell, Miller, Pujara chase down Rajasthan's 192. More »

T20 test for Cheteshwar Pujara

T20 test for Cheteshwar Pujara

The class act from Saurashtra may have to rethink his approach to the mannerless format. More »

Special meeting to replace Srinivasan

Special meeting to replace Srinivasan

The BCCI is likely to convene a special general body meeting (SGM) in May to replace N Srinivasan on the board's disciplinary committee. More »

Roach escapes injury after car crash

Roach escapes injury after car crash

The West Indies fast bowler lost control of his BMW sedan due to slippery road conditions in his native Barbados on Saturday. More »

Shastri in proposed IPL probe panel

Shastri in proposed IPL probe panel

Some members stressed on the need for proposing names with an "impeccable record and clean image". More »

Day of Supreme reckoning

Day of Supreme reckoning

Apex court to decide on BCCI’s proposed new committee today. More »

Repose faith in Indian coaches

Repose faith in Indian coaches

All of them cost plenty of dollars which I feel is unnecessary for a two- month tournament, says former cricketer Yajurvindra Singh. More »

Panel can help clean mess: Raghavan

Panel can help clean mess: Raghavan

The former CBI Director is one of the three candidates proposed by the BCCI to head the enquiry into the IPL betting and spot-fixing scandal. More »

Cook relieved after period in limbo

Cook relieved after period in limbo

The England captain is looking forward to a fresh start after a dispiriting Ashes defeat last year. More »

[INTERVIEW] Jayawardene and Sangakkara

[INTERVIEW] Jayawardene and Sangakkara

Mahela Jayawardene and Kumar Sangakkara go over their World T20 win, and feel grateful to have fans whose support remains unwavering in victory and de… More »

Need to improve fielding: Ashwin

Need to improve fielding: Ashwin

[T20 Newsline] Lacklustre Super Kings, fast-improving Sanju Samson and other news from IPL-7. More »