Huge rise in motor vehicles imports raises concerns

    The rapid increase in the imports of consumer durables including motor vehicles in recent months driven by credit available at low interest rates, among other things, has raised some concerns, the banking regulator said this week. “The Central Bank is Economic Research Department closely monitoring these developments in order to ensure that credit continues to be available to support productive economic activity while avoiding excessive expansion in credit in the period ahead,” the Central Bank (CB) said in its monetary policy review for August. The expansion in private sector credit in the first half of the year was largely due to higher disbursements of credit to the industry and services sectors. Economists have expressed concern that imports have sharply risen while exports have been affected by the CB protecting the rupee against international pressure. Most other currencies have weakened against the US dollar. ENDS