Port Wings News Network:
The Federation of Indian Export Organizations (FIEO) has welcomed the RBI’s repo and reverse repo rate cut of 40 basis points by RBI, extension in the moratorium period for another three months till 31 August, 2020 along with the extension of the pre and post shipment credit for the exports sector from existing 12 months to 15 months as a “much needed respite” for the overall exports sector.
In a media statement, FIEO President Mr Sharad Kumar Saraf stated that this will allow more liquidity in the hands of the exporters thereby helping them in fulfilling their overall export obligation during such difficult and testing times.
We are ushering into an era of very competitive credit rates to help manufacturing and overall economy, said FIEO Chief.
The above measures will not only help in revival of growth but will also help in mitigating the impact of Covid-19 while ensuring that the inflation remains within the target range, observed Mr Saraf.
Besides steps taken with regard to outward remittance for imports being extended from 6 months to 12 months, will help importers as they will have the longer repatriation period. Rs 15000 Crore line of credit to Exim Bank for Dollar Swap facility will help in leveraging long term and project exports as a “marketing tool” as buyers would be more willing to buy products from the seller.
However, self-sufficiency on the Forex Reserve front with USD 487 billion equivalent to 1 year of imports is quite a good sign for the economy. Further RBI’s assessment of the economic revival during the first half remains bleak with signs of revival to be only seen during the second half of the financial year, President FIEO urged the government for immediate announcement of an export package covering all the sectors of exports and implementation of the economic measures announced at the ground level for quick and early starting of trade and businesses across the country during such difficult and testing times.
Mr Saraf suggested that RBI should continuously monitor the delicate economic situation and make pragmatic announcements after every two months interval.