RBI rightly prioritized growth over inflation by holding repo rate: PNB CEO & MD CH S S Mallikarjuna Rao
New Delhi/IBNS: The RBI has rightly prioritized growth over inflation to rejuvenate economic growth on a durable basis and mitigate the extraordinary impact of Covid 19, said CH S S Mallikarjuna Rao, MD & CEO of Punjab National Bank (PNB).
The decision of keeping the repo rate unchanged along with maintenance of accommodative stance is on expected lines as low interest rates are critical to economic revival, he noted.
"Additional liquidity measures through extension of deadline of On tap TLTRO scheme till December 31, 2020 will have positive implications for stressed sectors like retail, MSME and real estate," Rao said.
Amendment of guidelines related to export credit in foreign currency and restructuring of Derivative contracts is a much needed move to ensure smooth transition from LIBOR and meeting the incipient challenges, he said.
Deferral for achievement of financial parameters under Resolution framework 2.0 will address the revival difficulties faced by the businesses in meeting the operational parameters.
Attributing inflation risks to temporary supply shocks, MPC has also indicated that it will anchor inflation expectations as soon as strong and sustainable growth is assured, he stated.
The Reserve Bank of India (RBI) kept the repo rate unchanged at 4 per cent in its bi-monthly policy on expected lines to support growth hit hard by the COVID-19 pandemic.