RBI Makes Massive Reduction In Repo Rate By 75 Basis Points & Forecasts Global Recession Amid Crisis
The RBI's Monetary Policy Committee (MPC) has voted in favour of an interest rate cut to the tune of 75 basis points. Repo rate is down to 4.4 per cent. Shaktikanta Das announced measures through which a total Rs 3,74,000 crore will be made available to the country's financial system.
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The RBI's Monetary Policy Committee (MPC) has voted in favour of an interest rate cut to the tune of 75 basis points. Repo rate is down to 4.4 per cent. The central bank also lowered the reverse repo rate has also been reduced by 90 basis points to 4 per cent. Monetary Policy Committee member voted in favour of the rate cut.
Everything hinges on depth of Covid 19. Life in the time of Covid 19 has been unprecedented”: RBI Governor said. Make no mistake, it is a fight never seen before, the RBI governor said. He called upon the need to keep the credit flowing to the stressed areas of the economy.
RBI’ government made an astute warning that global slowdown could make things difficult for India too, despite some help from falling crude prices. He said during the press conference: "This kind of uncertain outlook has never been seen before and the need of the hour is to do whatever is necessary to shield the economy from the pandemic.”
Governor Das announced measures through which a total Rs 3,74,000 crore will be made available to the country's financial system.
Another big bang announcement from RBI is for the loan moratorium as relief comes where banks are permitted to allow a 3-month moratorium on payment of installments of all term loans outstanding on March 1, 2020. More so, it applies to all regional, rural banks, co-operative banks, NBFCs including Housing Finance Companies and will not impact the asset classification downgrade and will have no adverse impact on credit history of beneficiaries.
RBI also took measures to expand liquidity. RBI will conduct auctions of TLTRO of upto three-year tenor of appropriate sizes for a total amount upto Rs 1 lakh crore at a floating rate, linked to policy repo rate. Further, under the measures announced, it includes those in primary markets and secondary market purchases such as mutual funds.
Das said war effort being mounted to fight virus, using conventional & unconventional measures in battle ready mode.