New Delhi, April 8 (NationPress) The Reserve Bank of India has opted to maintain the repo rate at 5.25 percent, a decision that economists and bankers believe will bolster the ongoing recovery, stimulate credit growth, and stabilize borrowing costs.

According to Ajay Kumar Srivastava, Managing Director & CEO of Indian Overseas Bank, the central bank's choice demonstrates a balanced and 'safety-first' strategy that emphasizes macroeconomic stability. He also praised the RBI's commitment to enhancing the ease of doing business, particularly for MSMEs.

He highlighted the recent removal of due diligence prerequisites for joining the TReDS platform, which will greatly improve liquidity access and enhance working capital efficiency for small enterprises.

Vinod Francis, SGM & Chief Financial Officer of South Indian Bank, noted that the unchanged rate accounts for rising inflation risks and provides essential stability to the financial sector. He added that a stable rate environment, coupled with sufficient liquidity, is likely to foster credit expansion across retail and MSME sectors while aiding lenders' asset-liability management.

Srinivasan Vaidyanathan, Operating Partner at Essar Capital, remarked that the decision to hold rates steady aligns with expectations and reflects the RBI’s ongoing effort to reconcile growth with inflation control. He emphasized that the central bank is also working to curb excessive depreciation of the rupee amidst global uncertainties, indicating a preference for macroeconomic stability and prudent policy measures. Although the pause may postpone immediate reductions in borrowing costs, this policy consistency grants businesses and investors better clarity and confidence for long-term planning.

Tribhuwan Adhikari, MD & CEO of LIC Housing Finance, views the stable rate environment as beneficial, particularly for homebuyers in the affordable and mid-income categories.

Dipti Deshpande, Principal Economist at Crisil Ltd, commented on the monetary policy, stating that the fiscal capacity to absorb some of the escalating energy costs from ongoing conflicts has mitigated their effects on retail inflation thus far.

Prashant Vasisht, Senior Vice President and Co-Group Head at Corporate Ratings, ICRA Limited, mentioned that while crude and product supply chains may take considerable time to normalize post-ceasefire, some crude oil and petroleum product supplies, such as naphtha and LPG, will begin to alleviate immediate shortages.

aar/pk