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Export credit refinance rate cut to seven per cent

As a follow-up to the recent cut in export credit rate from nine per cent to seven per cent, announced by Commerce Minister Ramakrishna Hegde, the Reserve Bank India has announced an identical two per cent cut in export credit refinance rate.

The export credit interest rate has also been slashed from 11 per cent to nine per cent. The revised rates are effective August 6 and will be valid up to March 31 1999. Later, status quo ante might continue unless notified otherwise, media reports hinted.

Under-180-days pre-shipment credit schemes will henceforth incur interest rate of nine per cent, and 180-to-270-days schemes 12 per cent. Rate for post-shipment schemes will be nine per cent, down two per cent.

The rate-cuts are expected to buoy up exports that have registered only a 2.64 per cent growth to $ 33.98 billion in 1997-98, due to global economic slowdown and Asian crisis. However, there is another opinion that exports will continue to stagnate for sometime, though the RBI's measures might help arrest the slide.

UNI