Consumer electronics and appliances manufactures have unanimously hailed the RBI’s move to slash key policy rate by 0.25 per cent. The manufacturers said that it will add to the “festive fervour” with lower interest driving demand and boosting the overall business sentiment.
“The timing cannot be better than this as it will certainly add to the festive fervour with lower interest rates, helping in increasing our rural consumption,” Panasonic India Head – Sales & Services Ajay Seth, was quoted as saying by PTI.
The expected lower interest rates coupled with EMI schemes that companies are offering will further make customers stretch their budget, he added.
The Monetary Policy Committee (MPC) recently decided at its first policy review to reduce the benchmark repurchase rate by 25 basis points to 6.25 per cent. The Reserve Bank of India’s key policy interest rate has now been cut to its lowest level since 2011.
“The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index inflation at 5 percent by Q4 of 2016-17,” the central bank said in its statement. Retail inflation dropped to a five-month low of 5.05 per cent in August
Haier India President Eric Braganza told PTI: “This rate cut by RBI should help the consumer durables industry. It should have a positive effect on consumer sentiments. We are hopeful of a good festive season.”
The durable makers, who had witnessed flat growth in the last two years, are expecting this year a better show on account of good monsoon and 7th Pay Commission.
“Overall there is a good feeling in the market with good monsoon and implementation of the 7th Pay Commission and rate cut by the RBI. This will further help consumers buy more products. We expect consumer durable industry to grow by at least 15-20 per cent this festive season,” Director, Lloyd Electric & Engineering Ltd, Nipun Singhal was quoted as saying by PTI.
Intex Technologies CFO Rajeev Jain said the rate cut was the biggest Diwali gift by the central bank.
“We feel banks and NBFCs will directly benefit by the 25 bps fall in interest rate. We also hope that it will be passed on to consumers, resulting in recovery of consumer sentiments, thereby giving boost to consumer durables and housing demand during this festive period through cheaper financing and loans,” Jain said.
According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), this a positive sign for the industry and it will boost the overall business sentiment.
“It is a strong indication for an investment friendly climate as it helps catalyse growth by enhancing business confidence. At the same time, indigenous manufacturing will get the necessary boost to further elevate the consumer durables industry,” CEAMA President Manish Sharma, was quoted as saying by PTI.