Tirupur Exporters Association has appealed to banks to cut their lending rates with immediate effect.
While welcoming the RBI’s decision on reduction in the repo rate by 25 bps, TEA President A. Sakthivel said it should have been cut by another 25 basis points, since the weighted average lending rate of banks had only declined by 36 bps to 12.17 per cent during 2012-13 (up to February). This is despite the cumulative reduction of 100 bps in the RBI’s policy repo rate during this period.
A reduction in the interest rate is of paramount importance at this juncture, as the woven and knitwear exporting units have been badly affected because of the increasing cost of finance.
While stating that the exporting units could opt to hedge their foreign currency exposure and stipulate a limit on the unhedged position, Sakthivel reiterated the association’s plea for a separate chapter for exports in the Monetary Policy .