Hike in export refinance limit to bridge liquidity gap: M&M

The central bank's move to keep rates unchanged disappointed both the equity and bond markets. However, the Reserve Bank has decided to enhance the export credit refinance (ECR) limit to 50% of the outstanding rupee export credit for banks, from 15%. This move will inject Rs 30,000 crore into the system. Welcoming this step, VS Parthasarathy of Mahindra and Mahindra (M&M) highlighted the dual impact of this move. "It gives two impacts, it gives liquidity and secondly it has a basis of getting rates reduced for the exporter or it gives a little bit of cushion for the bank to act the way that they want.".........

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