New Delhi, May 22 (SocialNews.XYZ) India is better placed to manage retail inflation among the top 10 economies, according to an analysis by leading industry chamber Assocham on Friday, suggesting the RBI to maintain the repo rate status quo while introducing liquidity, interest subvention and moratorium support measures.
India’s inflation stood at 3.2 per cent in February 2026 and rose to 3.5 per cent in April, a 0.3 percentage-point increase.
This performance is better than the significant increase in the US, where inflation rose from 2.4 per cent in February to 3.8 per cent in April, a 1.4 percentage-point increase.
India also performed significantly better than the inflation trajectory of France, Italy and Germany, where inflation increased by more than 1 percentage point in their respective inflation numbers between February and April. India is also better placed than Brazil in managing inflation.
“As India’s headline inflation still prevails in the benign conditions, we suggest RBI to maintain a status quo on repo rate in the forthcoming review of RBI monetary policy in the 1st week of June 2026,” said Nirmal K Minda, President, Assocham.
Though some increase in headline inflation can’t be ruled out, given the recent rise in energy prices, “it will be a transitory phase in the inflation trajectory, and we are hopeful that inflation will return to benign territory”, Minda noted.
Assocham appreciated the Central Bank’s decision to conduct a $5 billion USD/INR buy-sell swap auction on May 26, to inject long-term liquidity into the banking system and strengthen forex reserves.
“This will help manage liquidity conditions and stabilise rupee volatility amid global pressures and recent currency depreciation driven by geopolitical tensions and oil price shocks,” said Minda.
The industry body proposed an ‘On-Tap LTRO’ scheme to provide Rs 1 lakh crore in liquidity support at the Repo Rate to banks and NBFCs for lending to export-oriented and energy-related MSMEs.
It will primarily support working capital loans of up to Rs 10 crore, thereby ensuring easier access to credit and business continuity.
Assocham also proposed an interest subvention to reduce borrowing costs for MSMEs reliant on exports to the MENA and EU regions. Under the scheme, eligible units should be provided a 2 per cent interest subsidy on working capital loans of up to Rs 5 crore.
Additionally, RBI may consider a six-month loan moratorium or interest support for energy-intensive MSMEs, helping businesses manage rising costs and maintain financial stability, said the industry chamber.
Source: IANS
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