RBI in its Mid-Quarter Monetary Policy Review: December 2012, made no significant changes today, with cash reserve ratio (CRR) of scheduled banks unchanged at 4.25 per Cent. Consequently, the reverse repo rate under the LAF unchanged at 7.0 per cent and the marginal standing facility (MSF) and the Bank Rate at 9.0 per cent.
It has sent a message on which entire textiles and garment Industry is disappointed. Reacting on the Mid- Quarterly review Dr. A Sakthivel, Chairman AEPC said, "The unchanged interest rate is leading to a high cost of credit. The other input cost due to high inflationary prices is adding to woes. The job critical textiles sector needs softer loans to survive and grow. Despite the government maintaining the reform momentum softer loads to the textiles industry was need of time and it could have given boosts to the reform measures as well."
Chairman AEPC, commented that, "Despite GDP growth of 6 per cent export target set by the Ministry of Textiles, where in double digit. Therefore, by not reducing the credit rates the exports may not be in a position to reach the target.
This may consequently impact the foreign exchange earnings as well continue job losses in the entire value chain." Further, Chairman AEPC has requested a separate chapter for the export sector. He pressed that this may be done now.
