Exporters upset with RBI monetary policy

Say repo rate hike a surprise, not including exports under priority sector lending will affect growth of shipments

Exporters are unhappy with today’s monetary policy saying that the hike in the repo rate came as a surprise, while not including exports under priority sector lending, as was widely expected, will adversely impact the growth of shipments from the country.

“Increase in the repo rate was unexpected when everyone was expecting a positive announcement of reduction from the new governor. Exports can be boosted only by increasing the competiveness of our products in a way of reducing the interest rates, borrowed from the banks,” A Sakthivel, president, Tirupur Exporters Association said.

He also reiterated that a separate chapter for export sector in monetary policy is only way to protect the sector and urged the government to include the sectors under priority lending.

Referring to the recommendations made by Padmanabhan Committee of RBI, M Rafeeque Ahmed, president, Federation of Indian Export Organisations (FIEO) said, it should adopted soon to sustain the pace of growth in exports.

“Priority sector lending for exports, single window for consortium lending, exclusion of debt-equity ratio while appraising loans for exporting units should be considered forthwith by RBI for boosting exports and to offset the domestic slump across sectors,” Ahmed added.

It has been a long pending demand by the exports to include the sector under priority lending norms of banks. This will not only increase the availability of credit but will also help in reducing cost of such credit to exporters.

Total exports during April-August stood at $124.42 billion as against $119.77 billion, up by 3.89 per cent and total imports rose by 1.72 per cent at $197.77 billion over $194.44 billion during the corresponding period of last fiscal.