• PAGE ONE
• INDEX
• HOME

Further hike in lending rates will hit growth, says Assocham

K.R. Srivats

NEW DELHI, Aug. 2

EVEN as the rupee closed at an all-time low of Rs. 45.33 against the US dollar on Wednesday, a delegation of members of the Associated Chambers of Commerce and Industry (Assocham) has sought to impress on the Government that any further increase in lendi ng rates will adversely impact the growth of the industry in the coming months.

``We only told the Finance Minister that the current exchange rate of rupee against the dollar (Tuesday closing rate of Rs. 45.15/17) was not so bad that it would mandate any intervention by the country's central bank and that any further increase in len ding rates to industry at this juncture would only impact industrial growth'', Mr. Shekhar Bajaj, Assocham President, told Business Line.

The five-member delegation led by Mr. Bajaj met the Finance Minister, Mr. Yashwant Sinha, and pointed out that the Reserve Bank of India had only recently hiked its Bank Rate by one percentage point. ``We also told him the exchange rate has not come to s uch a dangerous level and the slide to a certain extent will only help our exporters and the domestic industry which faces competition from imports. Assocham does not expect the rupee to fall steeply from this level'', Mr. Bajaj said.

At the same time, it was also highlighted that the country's trade deficit should not be allowed to increase to ``unmanageable'' levels and there was a need to keep a constant vigil over the value of the rupee against dollar, he said.