The Agri and All Trade Chamber has expressed its appreciation for the Reserve Bank of India’s (RBI) decision to reduce the repo rate from 6% to 5.5% and the cash reserve ratio (CRR) by 1%. According to S. Rethinavelu, the chamber’s president, this move is expected to significantly improve liquidity in the banking system, with the CRR cut alone releasing approximately ₹2.5 lakh crore into the economy.
The reduction in the repo rate will enable banks to borrow at cheaper rates from the RBI, which is likely to lead to reduced lending rates for various sectors, including home loans, vehicle loans, business borrowings, agriculture, and Micro, Small, and Medium Enterprises (MSMEs). This, in turn, will ease borrowing costs and inject much-needed liquidity into the system.
Rethinavelu believes that the rate cut will serve as a catalyst for growth and confidence, particularly in the agricultural sector where input costs have been fluctuating and credit demand is rising. The measures taken by the RBI will strengthen MSMEs’ ability to access loans and scale operations, creating more employment opportunities.
The monetary policy adjustment is expected to ease working capital pressures and encourage industrial players to invest in productivity, innovation, and green infrastructure, contributing to national growth and global competitiveness. The rate cut will also encourage technology adoption and plant modernization, supporting export-oriented industries by improving cost-efficiency.
The Agri and All Trade Chamber has urged banks to ensure that the benefits of the RBI’s decision are promptly passed on to businesses, farmers, and industrial enterprises, maximizing the impact of the progressive move. Overall, the chamber is optimistic that the RBI’s decision will have a positive impact on the economy, particularly in the agricultural and MSME sectors, and will contribute to the country’s growth and competitiveness. The move is seen as a timely measure to boost economic growth and confidence, and the chamber is hopeful that it will have a positive impact on the economy in the coming months.