FIEO welcomes repo rate cut

The Federation of Indian Export Organisations on Tuesday welcomed the Reserve Bank of India's decision to cut repo rate to 4.5 per cent and said it would augur well for the exports, while asking for slashing rupee credit by 1.0-1.5 per cent in view of the appreciating domestic currency.

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"In the existing scenario of appreciating rupee, FIEO feels there is a case for substantial reduction in rupee credit by 1.0-1.5 per cent being given to the export community," the organisation said in a statement in New Delhi.

This would, to some extent, offset the impact of the appreciating rupee, which has reduced the profit margins of exporters by 4-5 per cent since January 2003, it said.

FIEO said the banking regulator's decision to cut repo rate would augur well for exports in terms of general reduction in the interest rate structure and improved credit offtake.

RBI had reduced the one-day and 14-day repo rate under the liquidity adjustment facility by 0.5 per cent to 4.5 per cent with effect from Monday.

FIEO asked RBI to make available enough dollars to borrow through "export refinance window" and said banks may be directed to extend pre-shipment credit in dollars at the global rates.