RBI move to cut repo rates progressive: SICCI

Chennai, May 22 (): Reserve Bank of India's announcement to cut repo rates and extend moratorium is 'progressive' and focuses more on developmental and regulatory policy measures, the Southern India Chamber of Commerce and Industry said on Friday.

RBI slashing of repo rates by another 40 basis points from 4.4 per cent to 4 per cent and simultaneous reduction of reverse repo rate to 3.35 per cent would ease liquidity, said R Ganapathi, president of SICCI, dubbed as one of the oldest trade bodies in Chennai.

"The rate cut will not only send out positive signals but will also compel banks to lend more", he said.

RBI's announcement is progressive and the unequivocal statement that monetary policy will continue to be accommodate till growth revives send positive signals, he said in a press release.

The additional extension of loan moratoriums by three months is an important booster aimed to cushion the impact of COVID-19 on the economy, he added.

Earlier in the day, the Reserve Bank announced series of measures including slashing of interest rates, extending moratorium on loan repayments and allowed banks to lend more to corporates in an effort to support the economy. VIJ SS