Rate hike will help the economy in the medium term, says Sumant Sinha
New Delhi, June 9 The Reserve Bank of India’s move to raise policy interest rates by another 50 bps within a short time frame will help the economy in the medium term, said Assocham President Sumant Sinha. Inflation although a concern, is “within manageable limits” as compared to elsewhere globally.
A thorough and clearly well-coordinated approach among the RBI, Finance Ministry, the government and monetary policymakers have managed the challenging global environment with foresight and calmness, he said. .
“It is understandable that there is concern about the rate hikes resulting in higher EMIs, but, in the longer run, the resulting price stability will play a crucial role in supporting rising demand, which is key,” Sinha said.
“The tamping down of inflation is critical to sustain the economy’s robust growth momentum, especially given continued global challenges including high energy and food costs,” he added.
The Centre’s move to link credit card payments with UPI brings in greater “convergence” to banks, credit authorities, with the entire fintech ecosystem, building greater financial inclusion.