While hailing the 25 bps cut in the repo rate, exporters in the knitwear hub of Tirupur have appealed to the banks to pass on the benefit to them.

“We are struggling and now after the implementation of the Goods and Sevices tax from July 1, there are some initial hiccups as well. The banks should, therefore, consider passing on the rate cut benefit,” the Tirupur Exporters' Association President Raja M. Shanmugham, said and added that the association has also made representations to the banks for enhancement of limit to ease working capital blockage.

Rate cut raises hopes for lower borrowing cost: FIEO

A Sakthivel, Regional Chairman, Federation of Imports and Exports Organisation (FIEO), said the 25 bps cut would trigger hopes of a lower borrowing cost and provide positive momentum in the present gloomy economic scenario.

"The entire business community expected it as inflation is coming down," he said and appealed to the banking regulator to take necessary steps to see that all banks pass on the benefit of the rate cut immediately.

"There is scope for banks to reduce the interest rate further beyond the RBI rate cut," he added, before stating that the industry was expecting a reduction of 50 bps in the key lending rate as inflation had softened to a record low of 1.54 per cent in June.

There has been an unexpected slowdown in economic growth; the manufacturing sector contracted in July following the GST and exporters have been facing a serious crunch in working capital flows. "There is, therefore, an urgent need to make adequate funds available at cheaper rate, particularly for the MSMEs to make our products competitive in the global market," the FIEO regional chairman said.

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