Indian Merchants' Chamber has welcomed the Reserve Bank of India's bi-annual Credit Policy for the current fiscal providing adequate liquidity for credit, investments and export demand while keeping a close watch on the price level and maintaining a soft interest bias conducive for growth.

The Monetary and Credit Policy 2004-2005

"RBI has taken a number of steps like broadening the definition of infrastructure lending, constitution of a working group on credit enhancement by state governments for financing infrastructure and banks allowed to raise long-term bonds to finance infrastructure," IMC president Nanik Rupani said in a release.

Kotak Mahindra Mutual Fund said that the policy seems to indicate that interest rate environment is likely to be stable and range-bound in the short to medium term.

The neutral bias of the policy clearly indicates that RBI is preparing the market for eventual tightening as and when the global macro economic factors and domestic fiscal and inflationary conditions warrant it.

L&T director and CFO Y M Deosthalee said the policy is an attempt to balance the twin objectives of sustaining the growth momentum in the economy while ensuring a conducive interest rate environment and ample liquidity.