Demonetization to help inflation remain under control, interest rates to fall: PHD Chamber

While appreciating the Government efforts to control inflation in the economy vis-a-vis reforms in supply chain, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said that demonetisation of rupees 500 and 1000 notes would also help prices to remain under control in the coming months.

Good monsoon behaviour and abundant supply of kharif crops coming in the market in the recent months has checked the rise in prices of many commodities, said Dr. Gupta.

The average WPI inflation so far in this financial year stands at around 3% during Apr-Oct 2016 and we are hopeful that inflation will fall below 3 percent in the coming months, he said.

The recent developments has created a good scope for further reduction in repo rate in the forthcoming monetary policy statement scheduled on December 7, 2016.

Repo rate at this juncture should not be more than 6% to give a big push to the economy with the new currency in circulation, said Dr. Gupta.

Reduced rate of interest with benign inflationary expectations would be a major breakthrough for the economy to enter the higher growth path, going forward, said Dr. Gupta.

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