Press Release

RBI’s repo hike rate well-reasoned: ASSOCHAM President

RBI’s repo hike rate well-reasoned: ASSOCHAM President

New Delhi, 9th June, 2022: The Reserve Bank of India’s (RBI) move to raise policy interest rates by another 50 bps within a short timeframe will help the Indian economy in the medium term, said ASSOCHAM President Sumant Sinha. 
He said that a through a clearly well-coordinated approach between the RBI and Finance Ministry, Indian government and monetary policymakers have managed the challenging global environment with foresight and calmness. 
Inflation, though a concern, is still within relatively manageable limits, especially when compared to many parts of the world. 
“It is understandable that there is concern about the rate hikes resulting in higher EMIs, but, in the longer run, the resulting price stability will play a crucial role in supporting rising demand, which is key,” Sinha said. 
Mr. Sinha added the RBI will have to continue to work closely with the government and other stakeholders such as India Inc. to ensure the robust pace of the economic recovery coming out of the pandemic’s third wave is sustained, in a higher interest rate environment. 
“The tamping down of inflation is critical to sustain the economy’s robust growth momentum, especially given continued global challenges including high energy and food costs,” he pointed out. “All in all, the RBI’s move is necessary and well-reasoned, given the current macro-economic currents,” the Assocham president stated. 
On fintech, the ASSOCHAM President stated that the government’s move to link credit card payments with UPI brings in greater “convergence” to banks, credit authorities, and in fact, the entire fintech ecosystem, building greater financial inclusion. 
He also lauded the critical role that the RBI is playing in leveraging the benefits of UPI to medium and small-scale enterprises (MSMEs).